For ICO issuers, it’s starting to look better to set up shop outside the US.
In a market environment of uncertainty, where regulation is unsure and the United States Securities and Exchange Commission has started investigating ICOs, most issuers and stakeholders are finding other jurisdictions a more conducive place to launch their projects.
This was the hot topic over at Token Summit III in New York City.
Startup founders, attorneys and investors all had strong opinions about how far they can go in a market environment where regulators and enforcement agencies know how easy it is for malicious actors to take advantage of unwary investors and scam millions of dollars out of unwitting buyers.
“The reason there’s a thousand people here, it’s not blockchain technology,” Jason Fang of Sora Ventures said, noting that he’s been going to blockchain events for years and it was all the same people until the initial coin offering (ICO) boom. “The difference is money. The difference is speculation.”
However, not everyone felt that hype meant rushing would be the right approach.
For example, David Sacks, former Paypal COO and investor in Craft Ventures, spoke about how getting compliance just right led to Coinbase becoming “the first really successful company in the space.”
Sacks wasn’t the only person. Throughout the day, several speakers returned to the question of regulation, and from the stage it became clear that the rest of the world isn’t nearly as complicated as the U.S.
Securities laws in the U.S. are based around the Roaring ’20s, which led to the Great Depression, Lowell Ness of Perkins Coie explained during a panel on regulation,explaining that:
“Literally the securities law is intended to exclude the moms and pops from too risky investment.”
Other countries, however, have a more relaxed approach and this is luring some ICOs overseas.
While geography seemed a main concern for many ICO issuers, it isn’t the only kind of distance that could lower risk. Time could also serve a token issuer.
Several issuers are relieved that they had finished their token fundraisers before the ICO hype started.
All of this said, it is crystal clear that the ICO industry is keeping a wary eye on both the unclear guidelines throughout the world and the thought that regulators could create rules that make their businesses illegal at some point.
Speaking to the fear felt by many toward U.S. regulators, MME’s Thomas Linder said:
“The U.S. needs to learn that in a globalized, decentralized economy, they are not the center of the universe anymore.”