With the rise in cryptocurrency such as the world famous Bitcoin and Ethereum , there is naturally a rise in the issue of initial coin offering (“ICO”) for the purpose of raising funds for Blockchain and Fintech projects.
This has resulted to potential issues identified by regulators across the world such as
- Lack of investor protection or customer protections
- Fraud risk
- High price volatility (Halvings.com has witness this on a daily basis)
There are now a number of Jurisdictions around the world that is adopting a case by case observation below is United Arab Emirate’s take on ICO:
- United Arab Emirates’ (UAE) Central Bank will come into effect in January 2018 that will include new guidance and regulations which was stated “virtual currencies are currently under review…and new regulations will be issued as appropriate”
- This is partially due to the fact that Dubai, UAE created creation of the world’s first sharia-compliant cryptocurrency coin although Dubai Financial Services Authority (DFSA) does not regulate cryptocurrencies nor ICO.
- Abu Dhabi Financial Services Regulatory Authority is adopting a case by case approach to the regulation of a cryptocurrency. If the cryptocurrency is classified as a security, it will be regulate under the relevant Securities Act.