Japan’s Mainstream Acceptance of Cryptocurrency Might Not Apply to ICOs
Japan has quickly become the model for early adoption after regulators officially recognized bitcoin and other cryptocurrencies as legal tender. However, the same leeway may not apply to initial coin offerings (ICOs), the controversial but insanely popular crowdfunding model that has raised over $2.3 billion this year.
Koji Higashi, cofounder of IndieSquare and prominent figure in Japan’s cryptocurrency scene, believes a ban on ICOs is within the realm of possibility. Several news outlets, including Forbes, have quoted Higashi as saying that a ban on on ICOs is a “definite possibility.”
Japan, which now trades nearly two-thirds of bitcoin, still faces a tentative regulatory climate, says Higashi. In a country known for conservative bureaucracy, regulators could start cracking down on new coin offerings as soon as problems arise.
The ICO market has already had its fair share of scams, with fraudsters copying other public raises and presenting them as their own. Earlier this month, Hacked.com reported extensively about ToTheMoon, an ICO that ripped off Giga Watt right down to its whitepaper.
Investors looking to cash in on the next big thing are especially vulnerable, says Higashi. While not all ICOs are scams, many of them are clearly looking to capitalize on the hype.
The State of the ICO Industry
Token raises have generated billions of dollars in 2017. In the absence of regulation, the blockchain community to create a standard legal agreement for the ICO market. This effort led to the creation of the Simple Agreement for Future Tokens (SAFT) project, which attempts to standardize public raises by vetting ICOs and investors.
The open source movement is uniting technology companies, legal experts and members of the blockchain community to converge on a framework that gives rise to a self-regulated cryptocurrency market. – Hacked.com (Sept. 21, 2017).
It remains to be seen whether SAFTs can step in to fill the void, or whether governments will move in to control the market. Blanket bans on ICOs have already been issued in China and South Korea.
Featured image courtesy of Shutterstock.