Russia is one of the 1st countries to propose proper regulations for ICO projects. In a recent document establishing these regulations, it is clearly stated that any company who plans to launch an ICO should have a nominal capital of $ 1.7 million. Only once it is having that capital, it can go ahead and launch the ICO.
Russia ICO guidelines:
Moreover, the document states that the issuing company should have a special bank account through which all requests are processed. The Ministry of Communications and mass media is the agency which would be regulating the licenses for ICO’s. The ICO licenses would be issued for a period of 5 years.
According to the document, a token is defined as an encrypted instrument on a distributed ledger technology. It further adds that token is an instrument which helps the owner raise a certain initial amount of capital by issuing the token by the distributed ledger
The document further adds that it is mandatory for the issuer of the ICO to provide the ability to redeem the coins through an irrevocable public offer. Further, it states that the settlement of the ICO should not take place in cash. The company should also be ready to buy back the tokens should the need arise at a nominal cost.
Russia proactive ICO guidelines:
This is the 1st time that any country is launching a formal guideline for the ICO. This would bring in more transparency to the ICO market. Moreover, as the ICO market matures and the amount of capital which is being raised by the companies increases more and more, it is necessary for the ICO market to be regulated. Only when that is the case, investors would have some trust on the companies which are launching the ICO.
These guidelines are a follow up on the guidelines which were previously issued on January 25. On this date, the Finance Ministry of Russia created a draft for the digital assets or regulation bill. This will not only refers to cryptocurrencies but also ICO’s. In fact, it also includes mining as well as trading activities. Owing to this very reason, it has a broad effect on the cryptocurrency world.
It remains to be seen whether other countries would follow suit or not. Many of the other countries are looking forward to regulating the ICO market in order to protect the investors against any kind of fraud.