What’s the Best Country for Your ICO?
With all the hype around ICOs, countries are starting to develop regulations in this area. We see varying approaches by different countries, but in general, we are witnessing a step forward in regulation. Already, there are countries that are more attractive to ICO startups than others. If you are thinking about raising funds through an ICO, read this article to get updated information about the regulatory status of countries across the globe in this field. This helps ICO teams form a basic understanding of what to expect and what’s the shortest path to go public while abiding by all necessary laws.
Countries that have Banned ICOs
Let’s start from the end. In the past year (2017), there was a preponderance of scam ICOs. This didn’t pass unnoticed by financial regulatory agencies. Investors lost a lot of money or locked their funds into buying tokens that are basically worthless. This was a first red flag that something needs to be done. And that’s exactly what happened.
- South Korea – ICOs are banned in South Korea. While there were a couple of unpleasant events associated with crypto exchanges, the government of this coutry decided to ban ICO.
- Peoples Republic China – On the grounds that ICOs are havens for scammers and other kinds of manipulations, China has decided to ban ICOs for now.
- USA – Well, things are a little complicated here. While ICOs are not really banned, people are banned from participating. Well, this isn’t completely true. In the USA, the SEC got involved in the whole story and decided that “only registered investors can participate in ICOs with investment over 1 MM $” If you are a registered investor and willing to spend 1 MM you are free to GO! Otherwise, you are obliged to invest in tokens under the radar.
When it comes to countries that show clear signs of supporting ICOs through good regulation, we mean mostly a handful of European countries and Singapore. Some of them are already becoming a standard for registering ICOs. Others are on the way. Let’s break this down a little bit.
Countries that Allow ICOs and are ICO Friendly
- Switzerland – This is not a European Union country, but Switzerland is famous across the world for its long banking tradition. People consider it a very stable and secure country for keeping your money. A general feeling is that they want to be known as a safe haven for ICOs since they were quick to regulate ICOs. When registering your ICO, it can fall under three categories as defined by the regulator. A lot of new ICOs opt for this country when registering their ICO.
- Estonia, Latvia & Lithuania – All three of these are European Union countries. These Baltic states not long ago signed a Memorandum of Understanding mentioning ICOs. They promised that they will support the FinTech industry and distributed ledger technology (for ICOs). Clearly, they want to attract international attention and a lot of people now are considering these countries for their ICO.
- Malta – An island nation and part of the European Union, this was one of the first havens for ICOs. Soft regulations and low taxes! What more could you ask for? Malta was one of the first countries to accept ICOs and to attract them! The 0% or 5% tax, depending on the kind of ICO, was a sweet candy for new startups. They also offer some hosting services and ICO development services. All this makes Malta a very attractive place for ICOs
- Singapore – When it comes to Singapore, a lot of people would say that this is the best place for an ICO. This Asian-Island-Country is famous for embracing cutting-edge technologies from various fields. The ICO is no exception. This all adds to the credibility of the country making it a place where a lot of good ICOs from 2017 started their journey. If your startup is from Asia, it certainly makes sense to go to Singapore!
Maybe it is a little unfair not mentioning other countries like Australia, Gibraltar, UK, Cayman Islands, and Russia, who are also trying to attract ICO start-ups. There were so many ICOs starting in the past months and 2017 that emerged from these countries. So, if you are looking where to start with your ICO, you should definitely consider them also. In different ways, all of them offer some advantages to the ICO business. So before going ICO, do your homework and research!
This year will be a defining one for the ICO business as lots of countries are starting to understand the need and potential of this industry. We will for sure hear from other countries in the coming months of 2018. Personally, I think that countries can only benefit from allowing this technology in their courtyard. The introduction of Know Your Customer in the EU added an extra layer of security and if practices like this continue, we will see this industry blossom. Of course, risks are always present, even with the best ICOs. But that’s how it is in this world; no pain, no gain.
Instead of a Disclaimer:
This article is conceptualized to give to the reader a general idea about the ICO regulations in different countries across the globe. It is very possible that other countries are regulating the ICO as we speak but are not in this article or the information here is incomplete. If you want to do an ICO in a specific country, find the regulatory agency in your jurisdiction. This is still an emerging industry and the so called gray zone of regulation – even regulators aren’t quite sure what to do.