Financial Regulators of New Zealand and Sweden Issued Statements Regarding ICOs

The respective financial regulators for Sweden and New Zealand have recently issued statements addressing initial coin offerings (ICOs). 

Also Read: Sweden Latest Government to Auction Bitcoins, Turns Tidy Profit

Sweden’s Financial Supervisory Authority [FSA] Has Issued a Statement Warning of the Risks Associated With ICOs

Financial Regulators of New Zealand and Sweden Issued Statements Regarding ICOsSweden’s financial regulator has issued a statement outlining a number of risks pertaining to ICOs. The document describes “ICO” as a “term used as the designation for launching a new token or other form of digital access based on… crypto.”

The FSA compares initial coins offerings to “grassroots” financing activities, stating “the purpose of an ICO is to raise funding from the public to develop a business idea for a completed business, not different from grassroots financing.” The FSA’s document highlights five areas of principle concern:

“No Rights” – The FSA states that “most ICOs are unregulated,” and as such are “not under the supervision of… authorities. As a consequence resulting lack of “consumer protections,” the FSA warns that there is “ no guarantee that the token or cryptocurrency launched really gives the proprietor any kind of right or claim against the publisher.”

“No Market Valuation” – The FSA states that “there is usually no requirement that the price… [of] a new digital asset is matched by a true market value,” and that the issuer “has no obligation to allow any independent party to evaluate the digital asset.”

“No Guaranteed Access to Secondary Market” – The FSA warns that there is “no requirement that… someone… will buy back the digital asset” once it is distributed.

“No Information Requirements” – The FSA emphasized the lack “requirement for anyone launching an ICO to provide all essential information,” nor that said information is “provided to all investors at the same time.”

“Risk of Investment Fraud” – The FSA warns that “the recent rapid increase in both the number of ICOs and their value can attract [developers] who have no interest in completing any project but are just looking for… money.”

New Zealand’s Financial Regulator Recently Addressed ICOs

Financial Regulators of New Zealand and Sweden Issued Statements Regarding ICOsNew Zealand’s Financial Markets Authority recently issued a statement that seeks to encourage entities within the ICO and cryptocurrency industries to consult with the regulatory body regarding their legal obligations.

The FMA “strongly encourages any businesses considering making an offer through an ICO to approach us early during their development phase.” The regulator asserts that the “specific characteristics and economic substance of an ICO determine if it’s a financial product – if it is regulated, and if so how.”

The FMA also has released guides for individuals and businesses seeking to offer “services such as cryptocurrency exchanges, wallets and brokering.” Such providers must “be a member of a dispute resolution scheme, be on the Financial Services Providers Register, must comply with fair dealing provisions in the Financial Markets Conduct Act.

The FMA states that it “wants to facilitate responsible innovation, and ensure that the regulatory regime remains relevant and agile.”

What do you think of the regulatory positions of New Zealand’s FMA and Sweden’s FSA? Share your thoughts in the comments section below!


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The post Financial Regulators of New Zealand and Sweden Issues Statements Regarding ICOs appeared first on Bitcoin News.

Source: BitCoin.Com
Financial Regulators of New Zealand and Sweden Issues Statements Regarding ICOs

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