ICOs - How They Avoid Regulations

[icodaily]

ICOS HAVE OPTIONS OTHER THAN REGULATIONS

During the last couple of months, the buzz about regulating ICOs has been increasing. SEC has already ruled over the DAO tokens, China and Korea banned ICOs for an unknown period of time. It even looks like that the Swiss are becoming careful. According to some, the “Wild West” ICO days are coming to an end.

Some ICOs are actually looking for a way to overcome regulations in different countries. It includes dealing with regulations that touch both the ICO and distributed business. There are three legal ways to work around them.

By dividing your tokens
The first option is to divide your tokens into “Security Type” and “Utility Type” tokens. By doing this, the ICOs don’t pop up on the SEC radar. The difference between such coins is the dividend payout.

By buying some freedom
It is possible to buy a company and transfer necessary rights and legal controls, thus dodging the regulations. One ICO that actually did this was Stox – prediction marketplace where token holders can predict the outcome. They announced that they were buying out Commologic, a non-[Suspicious link removed]pany that has an existing gambling license.

SAFT
This stands for Simple Agreement for Future Tokens. SAFT limits the participants in ICOs to “Accredited” or “Sophisticated” investors who can be defined as people with an income of at least $200,000 or net worth above $1 million.

The full blog post with information on ICOs can be found here: https://icodaily.net/2017/10/06/how-icos-avoid-regulations/

Regarding the topic of "Regulations"
What is your opinion, will ICOs get regulated in the near or distant future? At the moment they are in the stage of "Wild West" where people can't do anything about it. Lots of questionable ICOs are popping up and it's getting more difficult to sift them.

[1714843620]

1714843620

[Dullmartini]

Interesting. Is that from a US perspective? Because just as there are many securities laws around the world now so different exemptions and tests apply in various countries.

Also, I’m not sure I understand the second option. If you buy out a company but still issue new tokens is that not a security?

[icodaily]

Interesting. Is that from a US perspective? Because just as there are many securities laws around the world now so different exemptions and tests apply in various countries.

Also, I’m not sure I understand the second option. If you buy out a company but still issue new tokens is that not a security?

Yes, this is from the US perspective. All of this looks really interesting and what kind of practices ICOs use to pass certain regulations. I am really interested in how things would look in the East - China and South Korea.

The second option is to buy out a company that has a gambling license, that way you can issue tokens, but this is still questionable.

[Ledy Alise]

Hmm. I agree with the author of the article, regulation will begin very soon, or it will be impossible to use crypto-currencies. I think, will begin regulation from the tax sphere, somehow will regulate the consumption of energy resources (eventually, mining is environmentally harmful)

[icodaily]

Hmm. I agree with the author of the article, regulation will begin very soon, or it will be impossible to use crypto-currencies. I think, will begin regulation from the tax sphere, somehow will regulate the consumption of energy resources (eventually, mining is environmentally harmful)

Regarding the "Environmentally harmful mining". You should see the number of "Green" ICOs. It keeps increasing. Hydro power, Solar power, Wind power, Thermal power based mining farms? This sound really out of this world.

The question is - how soon will the regulations begin? Also, what effect will it have on the number of ICOs? Right now, according to my website, the number of Upcoming and Ongoing ICOs is huge...

[DosManos]

be positive - there is always a way
with lightning network things will change

[ValoremFoundation]

ICO's that have a business plan, a great team and a need that they are solving are worth looking at.

There are always those bad apples that will spoil the bunch, it's important to remember that this is a new industry and all new industries need to go through figuring themselves out.

Regulations exist for a reason, to protect the inexperienced investor and prevent fraud.

[munareal]

ICO will be regulated in the near future because we need people that will regulate the activites of ICO promoters and also report scam in other for them to be dealt with accordingly.Scammers should not be allowed to go scout free,they are fraudsters.Regulations will bring sanity and credibility to cryto currency . We need people to protect the investor because of  the high risk involve in digital currency .People are scared to bring in their funds.With a regulatory body mainstream society will have more confidence in crypto currency and will venture into it.