Switzerland’s ICOs Receive Code of Conduct
Switzerland’s ICOs might soon have to abide by what’s being called a Code of Conduct. It has been developed by the country’s Crypto Valley Association (CVA), which identifies itself as a “leading distributed ledger and blockchain ecosystem”. The association is well-known, especially in Switzerland, for helping businesses to enter the global cryptocurrency market. The purpose of the Code of Conduct is to advise Switzerland’s ICOs regarding legal and security issues, ethical conduct, and best practices.
Investors Must Be Well-Informed
CVA, which is a non-profit organization, states that companies offering ICOs should carefully and accurately inform investors. According to the CVA, investors have the right to know how the funds accumulated from ICOs will be used and all the possible risks involved. They should also know the purpose of the company’s technology and how it is intended to work. Furthermore, the company must convey this information in a simple manner, so that even a layperson can understand.
Clear and Flexible Regulation
Oliver Bussmann, President of CVA, says, “investors are often unaware of the true nature of their investment, and the documentation published to accompany token launches often minimizes or ignores the associated risk”. Therefore, he stresses the need for “clear, comprehensible, yet flexible regulation”. Mr. Bussmann also believes Switzerland’s ICOs, or any ICOs regardless of geographical location should adhere to some type of legal framework. In his professional opinion, all coin offerings would benefit from greater stability and security if they followed the guidelines outlined in SVA’s Code of Conduct.
Help Stop Scams
SVA thinks that more investors will feel comfortable investing in Switzerland’s ICOs if they have a better idea of they’re getting into. By following a standard code of conduct, there will be more transparency regarding how ICOs are operating. In September 2017, Finews.com reported that an association by the name of Quid Pro Quo had been found guilty of selling a fake E-coin. Along with other “business partners”, including Marcelco Group AG and Digital Trading AG, the association managed to collect 4 million Swiss Francs.
Eventually, regulatory authorities discovered that these E-coins were completely controlled by the association’s servers, instead of being stored on a public blockchain. After conducting an investigation, the Quid Pro Quo association and its partners were charged with violating the law. Specifically, the associating was found to not be operating with a proper license or authorization.
The Future of ICOs
ICOs have managed to raise very large investments in the past few years. However, due to numerous ICO scams, investors might be more cautious about investing in ICOs. If a company thinks their product is worthy of investor’s hard earned money, then they should be very clear and transparent about their mode of operation. Future ICOs that will offer their investors the most stability and security, as recommended by the CVA, will likely be more successful than those that don’t. It’s the responsibility of the companies that launch ICOs to keep their investors well-informed and satisfied.