(+) China to Issue State-Run Cryptocurrency?

Abu Dhabi’s financial watchdog has granted regulatory approval of initial coin offerings (ICOs), but has warned of “many risks” involved in the new crowdfunding model.

// — Discuss and ask questions in our community on Workplace. Don’t have an account? Send Jonas Borchgrevink an email — //

ICOs Get Approval in Abu Dhabi

The Abu Dhabi Financial Services Regulatory Authority (FSRA) has published guidelines on ICOs and cryptocurrency. The regulator said any ICO bearing a resemblance to a security will be governed accordingly.

Under the new protocol, startups wishing to go the ICO route must see FSRA approval. Companies will also be required to publish a prospectus, just like any initial public offering (IPO).

In regulating ICOs, the FSRA warned of an increased “risk of fraud and loss of capital.”

The FSRA adds: “This is particularly likely to be the case where a token issuer promises extremely high investment returns that are disproportionately high relative to those generally available in the market.”

The warning mirrors that of neighboring emirate Dubai, which recently issued a statement clarifying its position.

Abu Dhabi has also labeled cryptocurrencies “commodities” in the same basket as precious metals and energy. As such, they will remain unregulated. However, the watchdog says it may be willing to change its position on cryptocurrency in the future.

Regulatory Response to ICOs Mixed

ICOs have emerged seemingly without warning to become one of the most popular methods for capital raises. More than $2.3 billion has flowed into ICOs this year alone, surpassing early stage venture capital.

However, regulators have struggled to define and effectively control the market, with China, South Korea and more recently Russia issuing a ban on ICO raises.

Russian President Vladimir Putin has warned that cryptocurrencies pose “serious risks” and allow individuals to “launder criminally obtained money, evade taxes and even finance terrorism, as well as, of course, perpetuating fraudulent schemes that obviously may affect ordinary citizens.”

Meamwhile, Japan earlier this year recognized bitcoin as a payment method, but has yet to comment on ICOs.

Featured image from Shutterstock

Important: Never invest money you can’t afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.

Feedback or Requests?

Comments

comments

Filed in: Bitcoin Financial News Tags: 

You might like:

Ethereum Blockchain Startup Partners Thai Government on KYC Program Ethereum Blockchain Startup Partners Thai Government on KYC Program
The Cryptocurrency Hedge Fund that Operates Out of a Dorm Room The Cryptocurrency Hedge Fund that Operates Out of a Dorm Room
Banks Begone: UN’s World Food Programme Builds on Ethereum Blockchain Money Transfers Banks Begone: UN’s World Food Programme Builds on Ethereum Blockchain Money Transfers
Korean Cryptocurrency Exchanges’ Commission Sales Spike 85x in 2017 Korean Cryptocurrency Exchanges’ Commission Sales Spike 85x in 2017
‘Disruptive’ Blockchain Tech Requires Rapid Adaptation: India’s Prime Minister ‘Disruptive’ Blockchain Tech Requires Rapid Adaptation: India’s Prime Minister
US Lawmakers Build Appetite for Cryptocurrency Regulation US Lawmakers Build Appetite for Cryptocurrency Regulation
$850 Million: Telegram ICO Quietly Shatters Blockchain Fundraising Record $850 Million: Telegram ICO Quietly Shatters Blockchain Fundraising Record
Cryptocurrency Market Stabilizes at $500 Billion, Bitcoin Records 5% Gain Cryptocurrency Market Stabilizes at $500 Billion, Bitcoin Records 5% Gain
© 2018 Virtual Mining Bitcoin News. All rights reserved. XHTML / CSS Valid.