Initial Coin Offering Code of Conduct Adopted By Crypto Valley Association

ICO News, News | January 10, 2018 By:

The Crypto Valley Association (CVA) has published a code of conduct for initial coin offerings (ICO). The code will guide ICOs on proper conduct, taking into account all legal, moral, and security obligations. The framework is expected to bring clarity and confidence to the digital asset class.

The CVA is a not-for-profit association supporting the development of blockchain technologies and businesses in Zug, an affluent municipality and town in Switzerland known as Crypto Valley. The founding members included Bitcoin Suisse, Bussmann Advisory, iprotus, Lucerne University of Applied Sciences and Arts, Luxoft, Monetas, and Thomson Reuters.

CVA President Oliver Bussmann said that with the explosion of innovation surrounding blockchain and cryptocurrency technologies, it is unsurprising that organizations are leveraging similarly innovative financial instruments to raise capital.

“The Crypto Valley Association fully supports innovation in the blockchain space,” said Bussman. “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.”

The code calls on all companies running an ICO to do their business in a responsible and transparent way, and do not engage in practices which would be potentially damaging to the image and interests of the ecosystem. This includes being clear about how funds raised are intended to be used, how the token will function, and providing a clear risk assessment for the underlying technology.

Luka Müller, Chair of the Policy & Regulatory Working Group of the CVA, said the growth in popularity of decentralized applications and ecosystems, often launched as so-called ICOs, has caught the attention of regulators worldwide.

“Regulators 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,” said Müller. “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.”

The code of conduct for ICOs was joined by a general code of conduct for CVA members as well as the association’s vision and values. The CVA is hoping that the document will help frame the way its members engage with the industry, hereby protecting their own reputation and that of the CVA.

Bussmann concluded, “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.”