05.04.201818:51:00UTC+00Japan Explores Legalization of Cryptocurrency ICOs

While U.S. regulators are increasing scrutiny of initial coin offerings, Japan has unveiled proposed guidelines for formally regulating a controversial means of raising money in the cryptocurrency space.

Tama University and the Center for Rule-making Strategies proposed guidelines that would create rules necessary to “establish ICOs as a sustainable financing method”.

The research group outlined two principles aimed at tackling misunderstandings around the controversial form of venture-capital raising. The first principle presented would require issuers to disclose conditions around, and any changes to, the distribution of funds, profits and residual assets to investors.

The second principle requires issuers to give a means for possible investors to monitor the progress of the venture set out in the so-called white papers, which show the purposes, objectives of the project as well as technology and financial details of the ICO.

But critics of initial coin offerings say white papers today have a tendency to have insufficient data or targets. Moreover, the paper argues that white papers should be updated as the company progresses.

The report said that the principles are based on the idea that issuers need to explicitly define early a meants to enable token investors to confirm the progress of the plans written in the white paper. In addition, the paper said that white papers needed to be managed in a highly transparent manner.

Meanwhile, cryptocurrencies traded in a narrow range on Thursday. After trading mostly flat early in the session, bitcoin was down 0.2 percent at $6, 776.49. It briefly slid below $6, 600, hitting an intraday low of $6, 583.85. Ether was down 0.8 percent at $378.13, Bitcoin cash slid 1.5 percent at $640.50. Ripple was off 1.6 percent at 49 cents while Litecoin is up 0.3 percent at $118.93.