Swept in the cryptocurrency wave, many fintech startups are having a gala time out there raising funds through a process known as Initial Coin Offerings. ICOs, as famously known, is a way to raise money by offering digital tokens to investors in exchange of other cryptocurrencies like Bitcoins and Ethereum.
However, it seems that financial regulatory bodies from across the globe and countries are finding this method of raising funds to be quite suspicious. China have already introduced a ban on ICOs. Recently, South Korea also banned ICO. And now its seems that now Swiss Financial regulatory body FINMA are screening and investigating a number of ICO.
This means that the famous “Crypto Valley” in Switzerland, that hosts many startups, legitimate or fraudulent, is now under the lenses of FINMA. Such a decision to intervene the matter and investigate it further was made after a fraudulent operation came into limelight involving a scam currency named as “E-Coin”.
Although, there are no such specific rules or designated framework of ICOs operation, but FINMA sees it necessary at this point of time to intervene and make sure that the ICOs don’t breach the existing legislation that could possibly harm the investor’s interests.
A joint statement released by authorities states FINMA has observed a marked increase in initial coin offerings conducted in Switzerland. [We’re] looking into a number of different cases.
In response to the FINMA announcement, Crypto Valley President Oliver Bussman said:
“Bottom line, we welcome that the Swiss regulator is taking action and recognizes the need for clear guidance and oversight, especially with regards to KYC (know-your-client) compliance, while also fostering innovation.”
This shows that the Crypto Valley Association is openly supporting the Swiss regulatory bodies on ICO regulations and further announced that they would be working towards framing an ICO code of conduct to ensure that transparency in fund raising is maintained.
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