Is it easy for ICOs to be completely legalized in New Zealand? Find out here
Online currency is no myth anymore. Bitcoins and other forms of digital coins are as real as any other physical form of currency. Although there’s a sense of uncertainty circling around the future of these currencies, but many people have profited from their trade and continue to do so. Raising capital with them has become a big important part of the modern economy which can’t be ignored.
Most people do not realize the rise in business of initial coin offerings (ICOs) which has taken over the whole world. While China has clearly declared them illegal, most of the countries have yet to comment on this topic. As a matter of fact, the last thing we’d expect is an organized ban on ICOs since this doesn’t seem like an unplanned state of affairs. If anything for us to consider, it is the alarmingly escalating prices of online currencies.
Initial coin offerings (ICOs) have created a hype after raising more than US$2 billion in 2017. Taking New Zealand as an example, most analysts believe that interest in ICOs has dropped to a large extent but, securities laws can be applied to ensure the current trade remains secure.
Andrew Suggate, senior associate from a leading local firm says that there’s a need of adapting the laws uniquely to absorb the change.
“It’s just a question of how do we apply all of the old law and the old learnings from investment offerings onto that new framework and make sure that investors are protected but that we don’t kill an industry in New Zealand and that we enable it to grow.”
The same law firm revealed a research this year about how the law might be applied to ICOs and all kinds of digital tokens. Technically, ICOs are similar to IPOs excluding one single difference that it offers digital tokens which are open for all to take part in.
It is not a shocker that many companies have made millions of dollars through this with rich celebrities like Paris Hilton and Floyd Mayweather backing different offerings.
While it is true that there a lot of technical problems with legally giving ICOs a completely clean way such as some of the digital coins were financial products while others were hard to classify as they are a new technology. Suggate is of view that Financial Markets Authority (FMA) can do much about it as they’ve the power to declare something as a financial product.
Anyhow, Suggate believes that ICOs is a big thing and all efforts must be made to make sure it stays in a country like New Zealand. He stated,
“It’s big business, it’s growing, but it’s operated, I guess, slightly under the radar. They’re an advancement in technology, which can be used for good or bad purposes. But we should also be trying to think about how innovatively we adapt our laws so that we don’t kill the ability to do this type of thing in New Zealand.”
There had been some low-quality ICO offerings, but the industry must start to get mature.