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Swiss-based Startup Secures License to Launch Blockchain Investment Platform

A Swiss-based startup, Smart Valor, has secured a license from the country’s financial regulatory body to launch its blockchain investment platform in Q4 2018.

Smart Valor Obtains Regulatory Approvals

According to Reuters, Smart Valor, a blockchain startup based in Switzerland, recently gained approval from the Swiss financial regulatory body, FINMA. With this approval, the company can launch its proposed online investment platform before the close of 2018. Smart Valor, along with some blockchain startups, have successfully gained approval from FINMA, but many startups are operating without FINMA regulation.

Switzerland, a well-known “Crypto Valley” center, is host to several digital currency startups. However, the absence of clear-cut regulatory rules and periodic checkups are major setbacks for these crypto projects. Financial institutions like banks find the trend unsafe, and outrightly refuse to conduct any financial activity with the industry.

The Swiss company’s new status lends credibility to the blockchain industry, as its compliance with anti-money laundering rules will be monitored. It will, however, be supervised by VQF, a FINMA-proxy. VQF confirmed smart Valor’s membership on August 5.

According to the blockchain startup, its new online platform will kick off in the last quarter of 2018. The new platform will be for alternative investments, which will include virtual currencies. The company also said that these assets, supported by blockchain technology, will be in the form of tokens on its platform.

Olga Feldmeier, CEO of Smart Valor, said:

Most of these investments have previously only been available to a small elite of high-net-worth individuals and institutional investors. Tokenisation transforms the way people own things, improves liquidity, and makes these investment opportunities accessible to a broader audience of investors.

The company has expressed its intention to expand its services by mid-2019, by applying for a banking license. It further said that its expansion would include blockchain and cryptocurrency-based projects,

State of the Swiss Blockchain Landscape

Despite being one of the more recognizable centers for cryptocurrency and blockchain technology commerce, Switzerland is in danger of falling farther down the pecking order due to lack of banking support. Many projects are electing to move their operations to crypto-friendlier nations.

Earlier in the year, in a bid to stem the tide of ICO migrations from the country, financial regulators introduced firm guidelines for ICOs.

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Thai SEC Set to Approve Five ICOs

The Thailand Securities and Exchange Commission (SEC) is set to approve five initial coin offerings (ICOs). This move comes after the recent announcement of a new ICO regulatory paradigm in the country. The latest cryptocurrency laws will take effect later in June.

Five out of Fifty

According to the Thai SEC, about 50 projects applied for approval to conduct a fundraising campaign from the country’s capital market. Out of these 50 applications, five are expected to be given the green light once the new laws take effect. Commenting on the decision, the director of Thai SEC equity department’s corporate finance, Thawatchai Kiatkwankul, said that the five chosen projects are ready as initial pilot projects.

Thawatchai declined to identify the chosen projects, but he did offer clues as to how the SEC judges the merit of ICO projects, saying:

Projects which can be [easily vetted] and have commercial attributes attached to them will be considered for fund-raising.

If these five projects manage to gain approval from the Thai SEC, then Thailand will become one of the few nations to permit ICOs in a state-regulated environment. Other countries like South Korea, Russia, and Bermuda are attempting to create their own ICO regulations. In the meantime, countries like Switzerland and Singapore continue to experience an influx of cryptocurrency blockchain-technology based startups due to their ICO-friendly nature.

ICOs continue to be an integral part of the blockchain industry. It is the preferred fundraising method for many startups in the market. With its popularity has come concerns over fraudulent projects as well as talk that ICO tokens are, in fact, securities.

Thai SEC Cryptocurrency Regulations

On June 8, 2018, Thailand’s SEC announced new cryptocurrency regulations for ICOs, approved digital currency trading pairs, as well as licensing fees for market operators. This new crypto legal framework followed the May declaration which initially banned ICOs while waving taxes on cryptocurrency transactions.

The ICO regulations mandated all ICO portals to oversee their coin offerings for at least a year. ICO projects must also have a minimum base capital of 5 million baht which is approximately $157,000. The new ICO regulations place no investment restrictions for high-net-worth investors, but retail investors cannot invest more than 300,000 baht ($9,400).

The new regulations also approved seven cryptocurrencies – Bitcoin, Ether, Ripple, Bitcoin Cash, Litecoin, Stellar, and Ethereum Classic. These cryptos are the legally recognized trading pairs in the country. They were chosen for their liquidity and credibility. In addition to the seven approved cryptocurrencies, the SEC is set to give operating licenses to ten exchange and broker-dealer platforms. Others have until August 14, 2018 to apply for a license.

The new regulatory paradigm contains a comprehensive breakdown of the fees to be paid by all market operators. This includes the fees for cryptocurrency exchange plaforms as well as brokers.

Do you think the Thai SEC will approve more ICOs? Will the new ICO regulatory paradigm in Thailand attract more cryptocurrency and blockchain startups to the country? Keep the conversation going in the comment section below.

Image courtesy of Ethereum World News Archives.

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South Korea: Cryptocurrency Exchanges To Be Regulated As Commercial Banks, Boosting Global Legitimacy

Cryptocurrency traders, in not only South Korea, but the entire world can now relax a bit with the current news of South Korea announcing that the country will be regulating cryptocurrency exchanges in the same manner they regulate commercial banks The regulation shall be carried out by the Korea Financial Intelligence Unit (KFIU) in collaboration with other local financial regulators.

The Director of KFIU, Kim Geun-ik led a meeting that discussed on the existing regulations in the country that provide strict measures against money laundering and terrorist financing in the country. His sentiments echoed  the policy guidelines issued by the same government entity back in February when it was cracking down on cryptocurrency exchanges and ICOs in the country. Mr. Geun-ik also proposed stricter policies to both commercial banks as well as independent financial service providers.

In the meeting, the KFIU decided to include cryptocurrencies in its Anti-Money Laundering and Know Your Customer (KYC) initiative. What would then proceed the meeting, is the drafting and proposing of a bill in the South Korean Congress that would give local financial authorities the mandate to monitor traditional bank account and cryptocurrency users within their jurisdictions and in a transparent manner within the law.

A Spokesperson of KFIC had this to say with respect to the current development in the country:

Under current regulations, there are clear limitations in preventing money laundering on crypto exchanges because the only way authorities can spot suspicious transactions is through banks. If the bill of lawmaker Jae Yoon-kyung from the Democratic Party of Korea passes, local authorities will be able to impose identical regulations on crypto exchanges that are implemented on commercial banks.

The impact of this decision might be what South Korean traders have been waiting for in terms of having cryptocurrencies recognized by their country’s officials as a legal form of investing as well as being mediums of facilitating payments of goods and services. By encompassing Cryptocurrency exchanges in the country’s anti money laundering efforts as well as implementing KYC procedures, the industry will gain legitimacy in not only South Korea, but the entire world.

By doing this, South Korea will set precedence for any other nation in the process of coming up with some type of regulation towards the Cryptocurrency and ICO sectors of this new industry. One country that is probably watching on how South Korea handles its regulation, is the United States. The country is yet to give any clear direction, through its SEC, on how to handle cryptocurrencies, ICOs and exchanges within its jurisdictions.

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Thailand’s SEC Gives Thumbs Up To Big 7 (BTC, ETH, BCH, ETC, LTC, XRP, XLM)

There is a silver lining amidst the current crypto market decline that has been caused by a hack on the popular South Korean exchange known as CoinRail. Initial reports indicate that the crypto-markets have responded with a decline in volume of $14 Billion within a few hours.

However, as earlier mentioned, there is a silver lining in the form of news from Thailand that indicate that the SEC (Securities and Exchange Commission) has given clear guidelines with respect to the country’s regulatory framework for cryptocurrencies and ICOs (Initial Coin Offerings).

The SEC of Thailand, announced the above on Friday after approving the measures in a June 7th meeting. Part of the new measures include allowing seven cryptocurrencies to be used for ICOs as well as for trading pairs in the country.

These 7 cryptocurrencies are the fan favorites of:

  1. Bitcoin (BTC)
  2. Ethereum (ETH)
  3. Bitcoin Cash (BCH)
  4. Ethereum Classic (ETC)
  5. Litecoin (LTC)
  6. Ripple (XRP)
  7. Stellar (XLM)

The reasons for choosing these seven cryptocurrencies by the SEC were two: consensus credibility and the liquidity of the digital assets.

The Thai SEC also expects about 10 firms to apply for crypto licenses including crypto exchanges and crypto brokers and dealers. The crypto exchanges have up until the 14th of August to apply for the licenses. This date is in line with a 90 day notice given with the announcement of the approved cryptocurrencies and regulations by the Thailand SEC. The applications will be limited to companies registered in the country with an upfront fee of 5 Million Baht (Approximately $157k).

There will also be an annual fee for such crypto entities that will be calculated as 0.002% of the total trading volume for crypto exchanges and 0.001% of the total trading volume for brokerage firms. Each with a minimum fee of 500,000 Baht and 250,000 Baht respectively; and a maximum fee of 20 Million and 5 Million Baht will also be used to cap payments by both categories respectively.

With respect to ICOs, the SEC stated that each ICO should clearly state the type of tokens being issued as well as complete investment information. There will also be no limit  given to the amount of ICOs that can be offered to institutional and ultra-high-net-worth investors. However, there will be an investment cap of 300,000 Baht per individual per ICO and no more than 70% of the total value of offered tokens.

In conclusion, such clear crypto regulatory guidelines by the Thai SEC sets further precedence for any other country exploring the regulation of cryptocurrencies and ICOs.

[Photo source, fintechnews.sg]

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German Regulator Pledges 'Precise' Oversight of ICOs

Germany’s financial markets regulator has issued new guidance on how it will classify tokens sold during initial coin offerings (ICOs), including those it will consider securities.

On Feb. 20, the Federal Financial Supervisory Authority (BaFin) issued a letter of advice, announcing the move in light of an influx of inquiries from businesses looking to host token sales within Germany. The move follows its warning in late 2017 regarding the risks associated with investing in ICOs.

The letter (of which an English version is not currently available) reveals that BaFin will conduct a “precise case-by-case examination” of tokens to determine their legal status, instead of issuing broad rules that govern the activity. It says that tokens can represent various financial instruments, including stocks, derivatives and digital representations of voting rights.

The agency also used the letter to offer some advice to startups looking to launch ICOs: get in touch. It advises token offers to ascertain whether their respective products fall under existing national and EU-wide regulation.

BaFin also encouraged businesses to be aware of the regulatory grey-area of ICOs and tokens, advising them to get in touch with its offices prior to launching a sale.

Image Credit: Jan von Uxkull-Gyllenband / Shutterstock.com

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at news@coindesk.com.

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Gibraltar Will Take Market-Driven Approach to ICO Rules

Gibraltar may be moving to regulate initial coin offerings (ICOs), but officials say it will be up to the market to determine what a “good” token sale looks like.

The U.K. overseas territory announced that it was drafting ICO regulation earlier this month, which will include the implementation of a system for “authorized sponsors” that will be tasked with managing compliance. Gibraltar’s government outlined a tripartite approach that would address “the promotion, sale and distribution of tokens,” create a well-regulated secondary market related to tokens and establish standards for the provision of advice relating to token investment within its jurisdiction.

“We don’t see a place for us as a regulator, or indeed Gibraltar as a jurisdiction that makes its own laws, for saying what ‘good’ looks like in token sales,” Sian Jones, a senior advisor to the Gibraltar Financial Services Commission (GFSC), told CoinDesk in an interview Tuesday.

Instead, regulators would “rather let the marketplace of authorized sponsors come up with possibly a number of different options of what good looks like,” Jones said.

Jones explained that a one-size-fits-all regulatory approach would be inappropriate for the blockchain funding model, and that Gibraltar is instead developing a set of principles for best practice. With these principles, each authorized sponsor will be able to “come up with its own methodology” to apply to the ICOs or tokens that they sponsor.

Asked if these measures implied a kind of self-regulation on the part of sponsors, Jones replied:

“I don’t know that I would reach as far as saying it’s self-regulatory, but it certainly resonates – the idea that the marketplace will determine what a good ICO looks like.”

Paul Astengo, senior finance executive at the Gibraltar Finance Centre, told CoinDesk that the timing of the territory’s ICO regulation is a product of its efforts to “keep abreast of developments” in the blockchain and cryptocurrency industry.

He explained that the legislation is the logical next step after Gibraltar’s Jan. introduction of a license for companies working with distributed ledger technology, which has made it an appealing destination for blockchain startups.

Likewise, Astengo said, “We want to welcome good quality companies, we want to welcome people that wish to operate that are as concerned for their reputation as we are for ours. And we want to make sure that all of the different elements for this regulatory framework will be enough to support what they’re trying to achieve for their firms.”

Roadmap for crypto fund rules

Astengo and Jones also confirmed reports that Gibraltar is considering regulation related to investment funds associated with cryptocurrencies and tokens.

“We are reviewing the inclusion of crypto-related assets in funds in our investment funds,” Jones said.”I think it’s fair to say that our thinking is not yet as developed as it is around token sales. So it’s a matter that’s under review right now.” Officials expect to iron out additional details on the matter later this year.

Both officials view Gibraltar’s forthcoming ICO legislation as one element in a regulatory framework that will continue to evolve parallel to the progression of the blockchain and cryptocurrency industry.

“We see blockchain and distributed ledger technology as a long game,” Jones said. “We see this as something that will have an important and profound effect on trust relationships with both customers and enterprises, citizens and government, and therefore something which is highly sustainable.”

Gibraltar flag image via Shutterstock

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at news@coindesk.com.

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Gibraltar's Government Is Moving to Regulate ICOs

Officials in Gibraltar are reportedly weighing rules for initial coin offerings (ICOs), a move that follows a bid to develop a licensure framework for companies working with the tech.

The discussions will include input from members of the British overseas territory’s legislature as well as the Gibraltar Financial Services Commission (GFSC). Like many other countries entertaining ICO regulation, the government there has framed the move as one aimed at protecting investors and consumers.

“One of the key aspects of the token regulations is that we will be introducing the concept of regulating authorized sponsors who will be responsible for assuring compliance with disclosure and financial crime rules,” said Sian Jones, a senior advisor to the GFSC, according to Reuters.

The GFSC previously hinted that it would pursue regulations around ICOs when it published an advisory on the blockchain funding model. At the time, the regulator said that it was “considering a complementary regulatory framework covering the promotion and sale of tokens, aligned with the DLT framework.”

Late last year, the territory put in place a regulatory framework for blockchain businesses that shored up legal status of the technology as a means of transmitting payments. The proposal was first introduced in October, with passage by lawmakers in December.

Government officials said the move would facilitate an environment of certainty attractive to businesses. Gibraltar is also reportedly considering regulation relating to investment funds associated with cryptocurrencies and tokens.

Gibraltar image via Shutterstock 

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at news@coindesk.com.