Crypto Valley Association (CVA), the Swiss-based not-for-profit association supporting the development of blockchain and cryptographic related technologies and businesses, today announced the launch of a Code of Conduct for Initial Coin Offerings (ICO).
It is intended that this framework will guide ICOs on proper conduct, taking into account all legal, moral, and security obligations. The ICO Code of Conduct is expected to bring clarity and confidence to the still new, rapidly-growing asset class.
Oliver Bussmann, President of Crypto Valley Association said: “With the explosion of innovation surrounding blockchain and cryptocurrency technologies, it is unsurprising that organizations are leveraging similarly innovative financial instruments to raise capital.”
Among other points, the Code calls on all organizations running an ICO to be fully transparent about all details pertaining to the process. Importantly, these details should be disclosed in a manner that can be easily understood even by those that are not technologically sophisticated. This includes being clear about how funds raised are intended to be used and how the token will function, as well as providing a clear risk assessment for the underlying technology.
“The growth in popularity of decentralised applications and ecosystems, often launched as so-called ICOs, has caught the attention of regulators worldwide who want to be technology friendly, but also wish to understand the risks associated with the issuing, selling and transferring of tokens by clarifying their function, as well as their legal and tax status. In addition, because of the rise in popularity of ICOs, new categories of contributors participate who are often unaware of the true nature of their investment, and the documentation published to accompany token launches often minimizes or ignores the associated risk,” said Luka Müller, Chair of the Policy & Regulatory Working Group of the CVA, which developed the draft Code along with a panel of experts.
Headquartered in the Swiss canton of Zug, Crypto Valley Association is the independent, government-supported association established to take full advantage of Switzerland’s strengths to build the world’s leading blockchain and cryptographic ecosystem, working with government to foster the development of pioneering digital technologies in Switzerland and internationally.
“The Crypto Valley Association fully supports innovation in the blockchain space. We believe that token sales represent an exciting, sound and innovative approach to raising investment capital. Therefore, we believe Switzerland should support this trend by developing clear, comprehensible, yet flexible regulation that clarifies the legal status of ICOs and the tokens generated,” added Bussmann.
Along with the ICO-specific Code of Conduct, the document released today contains a general Code of Conduct for CVA members as well as the CVA’s vision and values. The Association hopes the document will help frame the way its members engage with the industry, thereby protecting their own reputation and that of the CVA. It is intended that upon joining the CVA, each member will acknowledge having read and understood the Code of Conduct and that it will conduct its business consistent with the values and principles outlined therein. The declaration will be reaffirmed on an annual basis, with each member being asked to confirm that they did not breach the Code. It is intended that those breaching the Code will face disciplinary action. The CVA is currently welcoming comments from members and the general public on the content of the Code of Conduct.
“The rapid development of token launches has raised concerns around stability and security, and as a leader in this field, it’s our 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,” concluded Bussmann.