Ethereum May Be Regulated Like Bitcoin
Ethereum is likely to be regulated by many governments in the upcoming months. Some countries including South Korea, China, and the US are already preparing to regulate Ethereum and its ICO market. This is because of the rising popularity of initial coin offerings (ICOs) and large amounts of capital being invested in them.
A POPULAR ETHEREUM MAY MEAN A REGULATED ETHEREUM
A project called EOS raised more than $335 million in total through their ICO campaigns as investors funded a project they knew practically nothing about.
EOS released a peculiar investment advice document entitled “Token Purchase Agreement” which claims that its native token EOS does not have a purpose or a use case. It went on to say that it should not be considered or used as a currency, investment, and/or commodity.
“As mentioned above, the EOS Tokens do not have any rights, uses, purpose, attributes, functionalities or features, expressed or implied. Although EOS Tokens may be tradable, they are not an investment, currency, security, commodity, a swap on a currency, security, or commodity or any kind of financial instrument,” the document read.
If the EOS token does not have any uses, purpose, or functionalities then purchasing the token seen superfluous. The primary purpose of the token is be to fuel decentralized applications launched on top of the EOS protocol but it has not even started testing this on its network. In fact, it is planning to run its first heavy testing and security audit in Spring of 2018, as explained by its software roadmap on their Github repository. So why would they do this? It seems counter productive.
Popular ICOs need to be careful since their legal status is uncertain. In fact, EOS laid out guidelines in order to avoid running in conflict with the US SEC. The EOS development team also emphasized that investors residing in the US are not permitted to purchase or participate in the EOS ICO or crowdsale. The legality of ICOs in the US remains unclear.
This is true in other countries as well. Currently, China is considering regulating the Ethereum industry and the ICO market due to their popularity. On June 2, Chinese cryptocurrency news source revealed that the Chinese central bank, the People’s Bank of China (PBoC), is planning to regulate Ethereum and its ICO market in the upcoming months.
Yao Qian, Deputy Director of the Science and Technology Department at PBoC, said that Ethereum is moving toward the right direction since it provides an autonomous smart contract-based infrastructure for decentralized applications and real business applications.
Qian explained that Ethereum is triggering a rapid development of blockchain-based applications in China and other regions. He said:
“You can open a real intelligent business application. Because of this, smart contract technology is in rapid development.”
On July 3, Park Yong-jin, representative of the ruling Democratic Party of South Korea, revealed that the government intends to regulate the Ethereum market by this year with the focus set on protecting investors and traders from bubble bursts, money laundering and tax evasion. The ICO market is likely be regulated along with Ethereum.