As much as the cryptocurrency fever is spreading wildly across the globe, many governments are still unwilling to offer regulations. In particular, the initial coin offering (ICO) niche is the most controversial. However, Germany is leading a growing voice calling for a global ICO regulation framework.
In an interview (German) with Handelsblatt, Felix Hufeld, a lawyer said that its time for ICO regulations. Hufeld is also the head of Federal Financial Supervisory Authority (BaFin), a major regulator in the German financial market.
Investors at risk
According to Hufeld, ICOs are risky but they are growing on an enormous scale. Therefore, governments to sit back in denial are to put the investors at risk of fraud and scams. He notes that as much as governments try to dissuade investments in the sector, people are going ahead with it. Given the lack of investor protection, many stand losing out in case of any unexpected events in the sector.
Interestingly, Hufeld is not a lone wolf in this call for a global ICO regulation framework. A prominent member of German’s Bundesbank (Central Bank) said in early this year that: “Any attempt to regulate cryptocurrencies such as Bitcoin must be on a global scale as national or regional rules would be hard to enforce on a virtual, borderless community.”
A global ICO regulation framework to curtail money laundering
Joachim Wuermeling, a director at the Bundesbank made the comments in the backdrop of blanket bans on crypto-related activities globally. Major economies like China prohibited ICOs and similar activities due to claims of money laundering and fraud.
Nonetheless, Wuermeling observed any policy aimed at cryptocurrency must be in the global spirit. This is because the new asset class is much more of a global phenomenon than a one country affair. Another Reuters report in June quoted Claudia Buch, Bundesbank vice president saying that authorities must monitor cryptocurrencies.
Common among all the comments is a call for the need to find a legal framework in which crypto can operate. This is because the asset class is still around and it could still abet money laundering.