Crypto Valley Association Issues its Own Code of Conduct for ICOs
- The Code of Conduct tackles moral, legal, and security practices in the ICO industry.
In early September of 2017, Ethereum founder Vitalik Buterin said that the world was “in an ICO bubble,” and that “in the long run, the market will need to find a way to judge which projects make sense and what their appropriate worth is.”
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Indeed, an industry that is still so new and unregulated, there is a serious need for guidance (at the very least). In an effort to make the ICO industry more 'hygienic' for companies holding ICOs as well as ICO participants, the Zug-based Crypto Valley Association has issued an official Code of Conduct for ICOs. The document is intended to provide guidance on moral, legal, and security practices and obligations in the ICO industry.
Crypto Valley Association President Oliver Bussman told Finance Magnates: “The Code of Conduct was designed to represent and respect the fast-paced nature of the Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamper with. The Evolution of BlockchainBlockchain was originally invented by an individual or group of people under the name of Satoshi Nakamoto in 2008. The purpose of blockchain was originally to serve as the public transaction ledger of Bitcoin, the world’s first cryptocurrency.In particular, bundles of transaction data, called “blocks”, are added to the ledger in a chronological fashion, forming a “chain.” These blocks include things like date, time, dollar amount, and (in some cases) the public addresses of the sender and the receiver.The computers responsible for upholding a blockchain network are called “nodes.” These nodes carry out the duties necessary to confirm the transactions and add them to the ledger. In exchange for their work, the nodes receive rewards in the form of crypto tokens.By storing data via a peer-to-peer network (P2P), blockchain controls for a wide range of risks that are traditionally inherent with data being held centrally.Of note, P2P blockchain networks lack centralized points of vulnerability. Consequently, hackers cannot exploit these networks via normalized means nor does the network possess a central failure point.In order to hack or alter a blockchain’s ledger, more than half of the nodes must be compromised. Looking ahead, blockchain technology is an area of extensive research across multiple industries, including financial services and payments, among others. Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamper with. The Evolution of BlockchainBlockchain was originally invented by an individual or group of people under the name of Satoshi Nakamoto in 2008. The purpose of blockchain was originally to serve as the public transaction ledger of Bitcoin, the world’s first cryptocurrency.In particular, bundles of transaction data, called “blocks”, are added to the ledger in a chronological fashion, forming a “chain.” These blocks include things like date, time, dollar amount, and (in some cases) the public addresses of the sender and the receiver.The computers responsible for upholding a blockchain network are called “nodes.” These nodes carry out the duties necessary to confirm the transactions and add them to the ledger. In exchange for their work, the nodes receive rewards in the form of crypto tokens.By storing data via a peer-to-peer network (P2P), blockchain controls for a wide range of risks that are traditionally inherent with data being held centrally.Of note, P2P blockchain networks lack centralized points of vulnerability. Consequently, hackers cannot exploit these networks via normalized means nor does the network possess a central failure point.In order to hack or alter a blockchain’s ledger, more than half of the nodes must be compromised. Looking ahead, blockchain technology is an area of extensive research across multiple industries, including financial services and payments, among others. Read this Term and ICO space. We want to ensure our members and potential members all adhere to them, so we can ensure a streamlined and concise process for ICOs.”
The Code of Conduct also contains a section intended specifically for members of the Crypto Valley Association with a CVA-specific Code of Conduct and a section explaining the CVA’s goals and ideals. CVA President Oliver Bussman told Finance Magnates that this section of the code is intended to foster healthy growth of companies within the CVA:
“The Crypto Valley Association knows the best assets to the crypto space are the dynamically talented entrepreneurs that are our members. We want to be sure to provide these members and any new members of the CVA with an ICO-specific Code of Conduct as they embark on their ICO. It is an exciting process, a process that for many entrepreneurs and companies has the ability to change the landscape of the crypto field.”
This Code of Conduct represents the latest addition in a growing trend of independently-organized structures for cryptocurrency-related practices. In August of 2017, the DABFI (Digital Asset and Blockchain Foundation of India) approached the Indian government with their own framework, hoping to create formal legal structures; in July 2017, the Uniform Law Commission (ULC) met in the United States to draft the “Uniform Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority (FCA), the US’ Securities and Exchange Commission (SEC), Australian Security and Investment Commission (ASIC), and the Cyprus Securities and Exchange Commission (CySEC) are the most widely dealt with authorities in the FX industry.In its most basic sense, regulators help ensure the filing of reports and transmission of data to help police and monitor activity by brokers. Regulators also serve as a countermeasure against market abuse and malpractice by brokers. Brokers adhering to a list of mandated rules are authorized to provide investment activities in a given jurisdiction. By extension, many unauthorized or unregulated entities will also seek to market their services illegally or function as a clone of a regulated operation.Regulators are essential in snuffing out these scam operations as they prevent significant risks for investors.In terms of reporting, brokers are also required to regularly file reports about their clients’ positions to the relevant regulatory authorities. The most-recent regulatory push in the aftermath of the Great Financial Crisis of 2008 has delivered a material shift in the regulatory reporting landscape.Brokers typically outsource the reporting to other companies which are connecting the trade repositories used by regulators to the broker’s systems and are handling this crucial element of compliance.Beyond FX, regulators help reconcile all matters of oversight and are watchdogs for each industry. With ever-changing information and protocols, regulators are always working to promote fairer and more transparent business practices from brokers or exchanges. Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority (FCA), the US’ Securities and Exchange Commission (SEC), Australian Security and Investment Commission (ASIC), and the Cyprus Securities and Exchange Commission (CySEC) are the most widely dealt with authorities in the FX industry.In its most basic sense, regulators help ensure the filing of reports and transmission of data to help police and monitor activity by brokers. Regulators also serve as a countermeasure against market abuse and malpractice by brokers. Brokers adhering to a list of mandated rules are authorized to provide investment activities in a given jurisdiction. By extension, many unauthorized or unregulated entities will also seek to market their services illegally or function as a clone of a regulated operation.Regulators are essential in snuffing out these scam operations as they prevent significant risks for investors.In terms of reporting, brokers are also required to regularly file reports about their clients’ positions to the relevant regulatory authorities. The most-recent regulatory push in the aftermath of the Great Financial Crisis of 2008 has delivered a material shift in the regulatory reporting landscape.Brokers typically outsource the reporting to other companies which are connecting the trade repositories used by regulators to the broker’s systems and are handling this crucial element of compliance.Beyond FX, regulators help reconcile all matters of oversight and are watchdogs for each industry. With ever-changing information and protocols, regulators are always working to promote fairer and more transparent business practices from brokers or exchanges. Read this Term of Virtual Currency Businesses Act.”
A New Big Business
The ICO industry began the year 2017 having cumulatively raised less than $300 million (ever). By the end of 2017, billions of dollars had been contributed to ICOs; more than $743 million was raised in the month on November alone.
Of course, with such incredible amounts of money suddenly flooding into this new space, there have been plenty of individuals who saw an opportunity to make a quick buck. Recently, the FBI began investigating the Confido ICO after it was dubbed an exit scam; the SEC filed charges against PlexCorp for the PlexCoin ICO, which promised a thirteen-fold return within a month--these two cases are just the tip of the iceberg.
While some entities holding ICOs may not be outright malicious, there is at least evidence of some incompetence--a study by the University of Luxembourg Faculty of Law, Economics, and Finance in early December revealed that critical information was often missing from ICO whitepapers, including (in some cases) any valid information about the issuing entity or the technology behind the coin being offered.
The Crypto Valley Association is eager to remove at least some of the risk from the practice of holding ICOs, and to improve the quality of provided through ICOs in general. In a press release, Bussman explained: “The rapid development of token launches has raised concerns around stability and security, and as a leader in this field, it’s [the CVA's] responsibility to support the industry. The widespread adoption of this framework, combined with careful supportive regulation would bring stability to an exciting but uncertain trend in blockchain.”
In early September of 2017, Ethereum founder Vitalik Buterin said that the world was “in an ICO bubble,” and that “in the long run, the market will need to find a way to judge which projects make sense and what their appropriate worth is.”
Discover credible partners and premium clients at China’s leading finance event!
Indeed, an industry that is still so new and unregulated, there is a serious need for guidance (at the very least). In an effort to make the ICO industry more 'hygienic' for companies holding ICOs as well as ICO participants, the Zug-based Crypto Valley Association has issued an official Code of Conduct for ICOs. The document is intended to provide guidance on moral, legal, and security practices and obligations in the ICO industry.
Crypto Valley Association President Oliver Bussman told Finance Magnates: “The Code of Conduct was designed to represent and respect the fast-paced nature of the Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamper with. The Evolution of BlockchainBlockchain was originally invented by an individual or group of people under the name of Satoshi Nakamoto in 2008. The purpose of blockchain was originally to serve as the public transaction ledger of Bitcoin, the world’s first cryptocurrency.In particular, bundles of transaction data, called “blocks”, are added to the ledger in a chronological fashion, forming a “chain.” These blocks include things like date, time, dollar amount, and (in some cases) the public addresses of the sender and the receiver.The computers responsible for upholding a blockchain network are called “nodes.” These nodes carry out the duties necessary to confirm the transactions and add them to the ledger. In exchange for their work, the nodes receive rewards in the form of crypto tokens.By storing data via a peer-to-peer network (P2P), blockchain controls for a wide range of risks that are traditionally inherent with data being held centrally.Of note, P2P blockchain networks lack centralized points of vulnerability. Consequently, hackers cannot exploit these networks via normalized means nor does the network possess a central failure point.In order to hack or alter a blockchain’s ledger, more than half of the nodes must be compromised. Looking ahead, blockchain technology is an area of extensive research across multiple industries, including financial services and payments, among others. Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamper with. The Evolution of BlockchainBlockchain was originally invented by an individual or group of people under the name of Satoshi Nakamoto in 2008. The purpose of blockchain was originally to serve as the public transaction ledger of Bitcoin, the world’s first cryptocurrency.In particular, bundles of transaction data, called “blocks”, are added to the ledger in a chronological fashion, forming a “chain.” These blocks include things like date, time, dollar amount, and (in some cases) the public addresses of the sender and the receiver.The computers responsible for upholding a blockchain network are called “nodes.” These nodes carry out the duties necessary to confirm the transactions and add them to the ledger. In exchange for their work, the nodes receive rewards in the form of crypto tokens.By storing data via a peer-to-peer network (P2P), blockchain controls for a wide range of risks that are traditionally inherent with data being held centrally.Of note, P2P blockchain networks lack centralized points of vulnerability. Consequently, hackers cannot exploit these networks via normalized means nor does the network possess a central failure point.In order to hack or alter a blockchain’s ledger, more than half of the nodes must be compromised. Looking ahead, blockchain technology is an area of extensive research across multiple industries, including financial services and payments, among others. Read this Term and ICO space. We want to ensure our members and potential members all adhere to them, so we can ensure a streamlined and concise process for ICOs.”
The Code of Conduct also contains a section intended specifically for members of the Crypto Valley Association with a CVA-specific Code of Conduct and a section explaining the CVA’s goals and ideals. CVA President Oliver Bussman told Finance Magnates that this section of the code is intended to foster healthy growth of companies within the CVA:
“The Crypto Valley Association knows the best assets to the crypto space are the dynamically talented entrepreneurs that are our members. We want to be sure to provide these members and any new members of the CVA with an ICO-specific Code of Conduct as they embark on their ICO. It is an exciting process, a process that for many entrepreneurs and companies has the ability to change the landscape of the crypto field.”
This Code of Conduct represents the latest addition in a growing trend of independently-organized structures for cryptocurrency-related practices. In August of 2017, the DABFI (Digital Asset and Blockchain Foundation of India) approached the Indian government with their own framework, hoping to create formal legal structures; in July 2017, the Uniform Law Commission (ULC) met in the United States to draft the “Uniform Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority (FCA), the US’ Securities and Exchange Commission (SEC), Australian Security and Investment Commission (ASIC), and the Cyprus Securities and Exchange Commission (CySEC) are the most widely dealt with authorities in the FX industry.In its most basic sense, regulators help ensure the filing of reports and transmission of data to help police and monitor activity by brokers. Regulators also serve as a countermeasure against market abuse and malpractice by brokers. Brokers adhering to a list of mandated rules are authorized to provide investment activities in a given jurisdiction. By extension, many unauthorized or unregulated entities will also seek to market their services illegally or function as a clone of a regulated operation.Regulators are essential in snuffing out these scam operations as they prevent significant risks for investors.In terms of reporting, brokers are also required to regularly file reports about their clients’ positions to the relevant regulatory authorities. The most-recent regulatory push in the aftermath of the Great Financial Crisis of 2008 has delivered a material shift in the regulatory reporting landscape.Brokers typically outsource the reporting to other companies which are connecting the trade repositories used by regulators to the broker’s systems and are handling this crucial element of compliance.Beyond FX, regulators help reconcile all matters of oversight and are watchdogs for each industry. With ever-changing information and protocols, regulators are always working to promote fairer and more transparent business practices from brokers or exchanges. Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority (FCA), the US’ Securities and Exchange Commission (SEC), Australian Security and Investment Commission (ASIC), and the Cyprus Securities and Exchange Commission (CySEC) are the most widely dealt with authorities in the FX industry.In its most basic sense, regulators help ensure the filing of reports and transmission of data to help police and monitor activity by brokers. Regulators also serve as a countermeasure against market abuse and malpractice by brokers. Brokers adhering to a list of mandated rules are authorized to provide investment activities in a given jurisdiction. By extension, many unauthorized or unregulated entities will also seek to market their services illegally or function as a clone of a regulated operation.Regulators are essential in snuffing out these scam operations as they prevent significant risks for investors.In terms of reporting, brokers are also required to regularly file reports about their clients’ positions to the relevant regulatory authorities. The most-recent regulatory push in the aftermath of the Great Financial Crisis of 2008 has delivered a material shift in the regulatory reporting landscape.Brokers typically outsource the reporting to other companies which are connecting the trade repositories used by regulators to the broker’s systems and are handling this crucial element of compliance.Beyond FX, regulators help reconcile all matters of oversight and are watchdogs for each industry. With ever-changing information and protocols, regulators are always working to promote fairer and more transparent business practices from brokers or exchanges. Read this Term of Virtual Currency Businesses Act.”
A New Big Business
The ICO industry began the year 2017 having cumulatively raised less than $300 million (ever). By the end of 2017, billions of dollars had been contributed to ICOs; more than $743 million was raised in the month on November alone.
Of course, with such incredible amounts of money suddenly flooding into this new space, there have been plenty of individuals who saw an opportunity to make a quick buck. Recently, the FBI began investigating the Confido ICO after it was dubbed an exit scam; the SEC filed charges against PlexCorp for the PlexCoin ICO, which promised a thirteen-fold return within a month--these two cases are just the tip of the iceberg.
While some entities holding ICOs may not be outright malicious, there is at least evidence of some incompetence--a study by the University of Luxembourg Faculty of Law, Economics, and Finance in early December revealed that critical information was often missing from ICO whitepapers, including (in some cases) any valid information about the issuing entity or the technology behind the coin being offered.
The Crypto Valley Association is eager to remove at least some of the risk from the practice of holding ICOs, and to improve the quality of provided through ICOs in general. In a press release, Bussman explained: “The rapid development of token launches has raised concerns around stability and security, and as a leader in this field, it’s [the CVA's] responsibility to support the industry. The widespread adoption of this framework, combined with careful supportive regulation would bring stability to an exciting but uncertain trend in blockchain.”