Enhancing consumer and investor protection in Initial Coin Offerings
Summary
In a recent study on ICOs from a comparative and interdisciplinary perspective, Assistant Professor Aurelio Gurrea-Martinez from the SMU School of Law argues that more protection mechanisms need to be put in place for the buyers of those tokens that do not meet the prevailing definition of "securities". Asst Prof Gurrea-Martinez and his co-author, Nydia Remolina, research associate at the SMU Centre for AI and Data Governance, noted that since many ICOs involve non-security tokens, regulators do not have the opportunity to be aware of their existence nor issuance. To address this situation, the SMU researchers propose that all ICOs, regardless of the legal nature of the token, should be disclosed to a centralised and public authority in order to reduce the risks of scams. This could be the place of residence or incorporation of the promoter, or the law could be chosen by the entrepreneur and disclosed to the public agency in charge of receiving information about ICOs. A special feature brought to you by Singapore Management University This is a monthly series on SMU research which aims to create significant impact by addressing these five societal challenges: Economies & Financial Markets, Social Fabric & Quality of Life, Boundaries & Borders, Sustainability, Innovation & Technology.