While a number of countries are yet unsure how to approach the ICO buzz that has been sweeping the fintech world, a few countries have gone ahead of others to adopt and adapt to the fundraising method that has raised more than $4 billion for blockchain projects and startups.
The ICO leaders are Singapore, Hong Kong and Switzerland, countries, which have created the enabling environment for ICOs to thrive. The Asian countries of Honk Kong and Singapore have become hubs for ICO even before the Chinese government banned the crowdsale in mainland China. The ban seems to have given rise to a subtle flow of ICO-seeking companies, which find their ways to Hong Kong and Singapore from China despite strong opposition from Chinese regulators against this move by Chinese companies.
The growth of Singapore and Hong Kong as destinations of choice for ICOs is associated with the work of fintech associations in the countries as well as governmental policies which favor ICOs. By Q3 of 2017 for instance, there already was concern about the impact of ICOs and digital currencies on the global economy. Compounding this concern was the involvement of scam companies that caused loss to investors and ICO, reputation.
This was when the Chinese government moved against ICOs placing a blanket ban in the country. Hong Kong Fintech Association, feeling concerned about the trend went to work and came up with a blueprint for best practices for ICOs. This became a model that inspired the crypto community to start a debate in Switzerland on having an internal regulatory measure, a sort of self-check for the ICO ecosystem.
The government of Hong Kong seemed to have seen the potentials of Initial Coin Offering due to the fact that it is traditionally tech-friendly, having set aside a technology fund for technology incubation parks. This and the work of the Hong Kong Fintech Association paved the way to make a name for Hong Kong as an ICO destination of choice in Asia.
Hong Kong has had several ICO events staged in the country. In December 2017, the Best Practices for Token Sale was officially launched. There has been reported inflow of Chinese funds to Hong Kong since the ban on cryptocurrencies and ICOs in mainland China, raising hopes among the Chinese crypto community that the ban will be lifted soon.
In Q2 of 2017, The Monetary Authority of Singapore rolled out sets of rules governing crowd sales in the country in view of the ongoing ICO debate. The Authority was among the early financial watchdogs to make certain clarifications concerning digital token with respect to securities thereby delineating functions among regulators in the country. By the end of the year, Singapore had hosted a number of ICOs some of which are big names such as QUASH which raised more than $100 million.
Switzerland may well be described as a fundraiser’s destination because of the countries financial and investment policies. It is no surprise therefore that the country hosted some of the biggest ICO successes such as Tezos, even Bancor is Swiss-Israeli.
A global ICO hub, Switzerland is home to some of the worlds most successful blockchain startups probably because it boasts an immense pool of skills as far as the blockchain technology is concerned. Its Crypto Valley may well be comparable to the Californian Silicon Valley. The Swiss coders of the Crypto Valley are well sought after and as the popularity of ICO soared, their demand around the world made them among the most expensive blockchain coders.
Those companies such as Tezos, DAO, and Bancor which together raised some of the largest amounts from token sales are associated with Switzerland is not really surprising. The country’s stability and monetary policies are exemplary. Mark Branson, the CEO of the Swiss Financial Market Supervisory Authority said that the country has positioned itself as a global leader in the thriving blockchain industry.
He said that his agency is tasked with screening companies that express intentions to launch ICOs to ensure that they meet the minimum requirements set for token sale in the country. According to him, “Our work consists in distinguishing the innovations that deserve to have a chance for success from the ones that are fraudulent”.
Despite its pro-fintech and pro-ICO stance, the Swiss ICO space is highly intolerant towards non-compliant companies in their ICO space. QUID, the company behind the E-Coin was one of the many that were shut down due to a breach of rules. The company was sanctioned for offering what was termed a fake token.