Blockchain Regulation Update: Month of May -- OPERATION CRYPTOSWEEP
This will be the first post of many a monthly Blockchain regulatory updated. These posts will comprise of a detailed description of the current regulatory framework that regulators are putting forth when it comes to ICOs, Cryptos, Tokens, Blockchain Businesses, Exchanges (centralized and decentralized), and taxes relating to cryptos. In other words, these posts will make broad strokes about regulatory developments in the field.
In the United States, the most important regulatory impact came from the the North American Securities Administrators Association (NASAA), where the association announced one of the largest coordinated series of enforcement actions by state and provincial securities regulators in the United States and Canada to crack down on fraudulent Initial Coin Offerings (ICOs), cryptocurrency-related investment products, and those behind them. http://www.nasaa.org/45121/state-and-provincial-securities-regulators-conduct-coordinated-international-crypto-crackdown-2/
The SEC supported this "CryptoSweep" in a recent publication. https://www.newsbtc.com/2018/05/23/sec-chairman-issues-public-statement-in-support-of-nasaas-cryptosweep/
Also, Mexican and Canadian Authorities also helped. https://cointelegraph.com/news/us-and-canadian-securities-regulators-coordinate-ico-probe-in-operation-cryptosweep
Other events came from the SEC as well as the South Carolina Attorney General. The latter we addressed in a previous post, but the former involves the SEC issuing a press release showcasing their very own "fraudulent ICO" website called "HoweyCoins" to highlight certain qualities that indicate an ICO is a scam or fraudulent. https://www.sec.gov/news/press-release/2018-88
Basically, the SEC created a site that would represent what a fraudulent or scam based blockchain website would look like with the intention to inform consumers in the space of the perils of investing in shady projects. With all things, its important to talk to the team of any project you are thinking about participating in. This site takes that notion a step further and shows the aspects of a project that can also tip you off to their illegitimacy. This space offers a high degree of transparency, so take advantage of it! Go into the telegram, slack, and/or discord and talk to the developers and project managers. Get a feel for who they are, what their intentions are, and above all else, whether they are responsive.
Around the world, many countries are trying to entice blockchain and crypto projects to come build their platforms in that country. For example, the Money Authority in Singapore constructed a three tiered regulatory frame work for dealing with exchanges. They said “MAS has observed the emergence of new business models in trading platforms, including trading facilities that make use of blockchain technology, or platforms that allow peer-to-peer trading without the involvement of intermediaries. As the current RMO regime has been in place since 2002, it is timely to review the regulatory framework for market operators to ensure that it continues to meet the demands of the changing landscape.” This new framework ostensibly provides easier inroads for those looking to enter and/or operate in this space. https://www.newsbtc.com/2018/05/24/singapore-looks-attract-crypto-exchanges-regulatory-revamp/
In a somewhat different vein, European regulators are calling for more regulation. However, countries with smaller GDPs want less regulation so that businesses will come contribute to their overall GPD. Hungry is a perfect example of this. https://cointelegraph.com/news/in-a-bid-for-transparency-european-crypto-exchanges-call-for-regulations
Overall, while regulatory changes are happening frequently, we have to always keep in mind that regulators move far slower than technological development. As a result, questions such as whether groups of tokens are securities in the US, or whether exchanges like Binance should move to more favorable jurisdictions will develop over time, and we can all expect them to be far slower than the market.