The regulatory framework for cryptocurrencies in various countries is still taking shape. The EU, for example, has yet to decide just how many rules it should establish for this particular market.
However, it appears that regulators, in general, are starting to have a more relaxed attitude to cryptocurrencies, according to CNBC technology correspondent Arjun Kharpal.
“I think what we’ve seen actually from several regulators around the world is that they seem to have been slowly becoming accepting of the cryptocurrency world, particularly of course the underlying technology—blockchain […] and they seem to understand that […] cryptocurrencies are here, they’re growing, more people are getting involved in them, and so they’re not trying to absolutely hamper them,” he says.
He then offers China as an example of a country that has cracked down full force on cryptocurrency trading. However, he adds that the UK and the US have imposed very little in the way of harsh regulations to interfere with the market.
“What [we’re] seeing now is not so much concern about perhaps some of the larger currencies but […] these ICOs—these new coins coming into the market which perhaps don’t have any product behind them, don’t have any backing behind them or anything, and they’re worth even less than a cent. And they’re likened to penny stocks,” Kharpal adds.
He believes this is the area giving regulators the biggest headache considering the lack of investor protections and transparency some of these projects have.
Nothing demonstrates this better than the SEC’s action against the PlexCoin ICO, which was scamming investors with promised returns of over 1,000%.
“Get rich quick” schemes are indeed perceived by regulators as one of the main dangers of an unregulated ICO market.
More or less the same emerged at the European Commission’s roundtable on cryptocurrency regulation at the end of last month, EC Vice-President Valdis Dombrovskis concluded that although ICOs are a possible engine for innovative firms to raise capital, there are still concerns about the current lack of accountability in the market.