As Ireland re-images itself in the post modern world of tax transparency, it will hopefully be at the forefront in proviing a business friendly regulatory environment for ICO's and cryptocurrencies.
With the prospect of IPO level funding for start-ups ICO (Initial Coin Offerings) are becoming increasingly popular are a means to generate capital for technology businesses.
As with IPOs pressure will mount on the authorities to regulate ICO's to avoid scams and protect investors. As Ireland re-images itself in the post-modern world of tax transparency, it will hopefully be at the forefront in providing a business friendly regulatory environment for ICOs and cryptocurrencies which would in this author’s opinion serve Ireland interest’s well in much the same way as our tax laws have in the past.
The recent senate hearing in the United States provide useful guidelines on how law makers view the whole cryptocurrency landscape. Some of the important takeaways are:
1. The preservation of innovation is a foremost concern.
2. Whether a token/coin is considered a security is still unresolved.
3. There is no real need to halt the practice of ICOs and cryptocurrencies from a consumer protection perspective yet.
4. Due to the decentralised nature of the technology strict regulation may result in a lost opportunity to any one country.
5. Exiting regulation may already provide a solid framework from which to regulate this burgeoning industry.
6. The industry does not yet pose a significant threat to traditional practices.
Cosgrove Gaynard Solicitors remain at the forefront of this new and exciting technology and how it interacts with business. As the first law firm in Ireland to confirm we accept payment in Bitcoin and other cryptocurrencies we endeavour to keep our clients informed of new developments in this area.
See more on the recent Senate hearing from the US here: https://www.banking.senate.gov/public/index.cfm/hearings?ID=D8EC44B1-F141-4778-A042-584E0F3B9D39
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It is really not for the SEC to determine whether tokens are security; this is to be determined by legislation or for the courts to determine. To date no court has determined whether or not tokens are deemed to be securities. That said it is clear that the SEC has interpreted the matter and are finding tokens to be securities. There is a case currently ongoing in New York which may however become the first court in the world to rule on whether or not tokens are deemed to be securities.Text Link
Initial Coin Offerings (ICO's) are not just for technology companies . They are often the beginning of a digital revolution for existing Companies which are already established In their field whether it be healthcare, insurance, property or another industry. Despite some bad press, the tightening of regulation in jurisdictions such as in the US, and indeed Facebook and Twitter banning advertisements , money has been pouring into the ICO market with $3 billion raised through ICOs in the first two months of this year. This is half the value of all funds raised throughout 2017, according to Coindesk data.Text Link
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