This Is How Startups and ICOs Can Avoid Collisions with Regulators

Hundreds of ICOs have raised billions around the world. Some were genuine while others were shut down by regulators for making false claims. A good example is Centra Tech that claimed it had partnered with Visa and MasterCard when it hadn’t. Blockchain projects have a close relationship with ICOs but what really gets on the nerves of lawmakers and regulators is the fact that someone created a digital currency from a computer. It is a good innovation but balance is calling out.

So, why is Balance Required

This new funding model has enabled startups to bypass traditional venture capital and raise funds. It is a good idea but at the same time, enthusiasts believe that it creates the potential for fraudulent activities where a lot of investors are drawn in and harmed. The enthusiasm still goes on and there is a need for a careful approach to come in.

Why the Regulation Heat is on

The US Securities and Exchange Commission, SEC,  has taken action against several ICOs since they were found to be in violation of the securities rules. Arise Bank in Dallas failed to disclose the criminal backgrounds of their key executives and falsely claimed that they offered bank accounts that were insured by the Federal Deposit Insurance Corporation. Their ICO was halted.

A Wall Street Journal analysis of 1,450 recent ICOs found that almost one in five were not honest and provided plagiarized investor documents that assured investors of guaranteed returns. These documents also included fake executive profiles and photos yet 271 suspected coin offerings still managed to gather $273 million! Fraudsters are out there minting money.

The lack of clarity is a cause of frustration for investors. This is not a healthy environment for innovation and therefore there is a need for some sort of guidance to enable investors to understand and avoid the current state of ambiguity.

Vivigle Transaction Monitoring Agent

This is a great service for token issuers and startups that they have to get on board. You will be protected against money laundering, theft or any other illegal activity that would put you in bad books with the regulators. It is important that you have the upper hand in monitoring transactions throughout the token cycle.

The Vivigle transaction monitoring agent service is designed specifically for token issuers to comply with regulatory requirements in various jurisdictions so as to protect their reputation and build relationships with financial institutions.

It is a good thing that blockchain and cryptocurrency entrepreneurs are bringing a shift but they also need a protocol of trust that investors can happily see as a guardrail that protects their interests too.

Regulators so far have provided crypto businesses with orders telling everyone what is expected but it is not guidance. They too do not understand the crypto world because no one has given them the need to. Build trust first and this is what will provide a guideline to the prosperous crypto and blockchain trade. Get rated with Vivigle and have a profile that regulators can trust.