ICO and Blockchain Governance
Neo and Eos have built their chains around our legal tender governance and Etherium is playing catchup, trying to implement these ideas after they were established.. NEO completed its refundable ICO, the first ever in token raising history were 15 refund requests were granted, amounting to 50.308364 BTC. Such a refundable scheme has never been practiced before and has proved to protect the right of ICO participants effectively. In addition, NEO Council is making strenuous efforts in prompting NEO’s sustainable development under existing laws and regulations. In Q4 2017, NEO establish a legal framework which is compliant in major countries for smart contracts running on top of the chain. NEO has developed its network to fit within existing business and regulatory frameworks. China’s Ministry of Industry and Information Technology, MIIT, released a set of state-approved blockchain standards centered around development, management, safety, and regulation in May 2017.
Compliance is inevitable after the blockchain industry matures to a certain stage. This is the task that
The Cryptocurrency and Blockchain Legal and Regulatory Task Force
is professionally addressing. To establish a fair and workable set of rules to apply on a individual case basis to startups, ico's and up and running systems. Neo decided to be compliant with laws and regulations in terms of the choices of design philosophy, consensus mechanism and governing model, from the start. These choices made Neo well prepared for regulatory challenges and opportunities waiting ahead.
Switzerland has set up rules to help deregulate the blockchain economy
Swiss regulator Financial Market Supervisory Authority ,FINMA, is a Swiss ico regulatory service, using a case by case ico analysis and not a one law fits all approach to anti money laundering rules . Finma requires icos to hold money for 60 days in a settlement account. A sandbox approach to exclude an ico from requiring a bank license, and the outline for a light license for them instead. A licensing requirement to operate as a securities dealer may apply, banking meta data may need to be included and how those ico funds are managed and by whom. criminal laws are applied to help eliminate fraud, hacking and embezzlement. A FinTech company is a company that offers financial services based on blockchain technology, crowdfunding, mobile payment applications or robo advice. If a blockchain provides coin wallets to its customers which allow repayment in fiat money governed by regulation or law it would fall under banking regulation and may also require a banking license. Finma adresses this problem with the lite wallet.
Uniform Electronic Transactions Act (UETA) recognizes the validity of electronic signatures and contracts under state laws If a change or error in an electronic record occurs in a transmission between parties to a transaction, the following rules apply. the security procedure is defined and those conforming to it, are the ones who will receive the validation fee for it. Under this rule if a coin holder sends in error, coin to the wrong address, that person who received those funds in error, should be required to return the funds. even if the blockchain is immutable, transaction due to error or mistake should be corrected. Usually the means by which this happens is restitution, or other details that would be prescribed by the law of mistake in U.S. contract law.
Eos has claimed that its pos system will prevent users from making irreversible txs errors this is built into their chain and is a requirement of our new standard for addressing governance rules.
To conclude, Ethereum lags behind NEO and Eos in addressing broader challenges such as regulation, transaction speed and cross-chain communication. NEO, which is centered around aligning with business and government needs according to MIIT’s standards, makes Neo the most popular platform for decentralized applications by providing advanced performance, a diversified ecosystem and compliance-ready solutions as the market stands today 20 April 18.
NEO has developed its network to fit within existing business and regulatory frameworks. China’s Ministry of Industry and Information Technology, MIIT, released a set of state-approved blockchain standards centered around development, management, safety, and regulation in May 2017When contrasted with Ethereum’s technology-first approach, Da’s initial framework prioritized stakeholders such as users, regulators, investors, developers, and pre-existing technology companies as separate members of NEO’s community. As a result, Ethereum lags behind NEO in addressing broader challenges such as regulation, transaction speed, cross-chain communication, and others – issues that NEO has mitigated, at least to some extent, with its more comprehensive plan. This reconfirms the very construct of NEO, which is centered around aligning with business and government needs according to MIIT’s standardsthe most popular platform for decentralized applications by providing advanced performance, a diversified ecosystem and compliance-ready solutions.
The ICON Project is a decentralized transactions network. The ICON Project aims to connect independent blockchains with different governance, so that they can transact with one another without intermediaries, similar to ADA's pos. Regulating a lot of these chains wont work because they will need to be rebuilt, redesigned to hardfork, to accommodate those new requirements will be costly.
Coins like Neo, Eos, ADA, XRP and XLM have built in some of the regulatory compliance rules that already exist to regulate other financial markets. The Cryptocurrency and Blockchain Legal and Regulatory Task Force is establishing themselves as the leader in regulation decisions, by putting the power of the regulatory decisions in the hands of engineers and BlockChain financial law makers and the business community that uses these chains.
MIT has meetings of the minds to impart their wisdom to the world. Coindesk is pointing this out. First of all, is MITs voice as important as say the computer engineers and program managers that have developed these chains, in implementing a set of rules now after they have been engineered?
CoinDesk, lets give these developers recognition and a voice on our sites. Pangeaecoin will assist any developer out there that would like to voice their knowledge and understanding concerning this regulation matter through Pangeae.
Coin Desk goes on to point out that these folks, Gary Gensler, a financial service regulator, has claimed Etherium and Ripple are securities by definition. "If Etherium and XRP are deemed securities, cryptocurrency exchanges and general industry promoters or foundations, or anyone who sold or evangelized projects like ethereum to the general public, could be subject to legal penalties."?
Neha Narula, the director at MIT Media Lab, added, " Insufficient regulation can actually stifle innovation by deterring honest players, because rampant scammers undermine market integrity". Ok that statement has some validity, But we are technologists, or at least have some technical savvy from school or work. When an old school stock market person approaches crypto warning signs and fears well up ,from inside and go of in their head. Its not safe ! is the resounding trumpet call to the masses and through the media. This gives the government the green light to proceed, after all citizens albeit not that savvy technically, are reaching out with their concerns. On the one hand we would like them to be able to participate but at what cost. Would it be better if we kept the two financial markets seperate? But using blockchain to further develop those older financial markets is whats happening now. However, education is just as important as regulating, in adopting wider use. Eos, for example came up with Dawn 3 to allow users to make tx mistakes and not lose their funds when they do . Thats Huge! and will help open the door to adoptibility.
The blockchain technology, notice I did not say ,"Industry," Its because Blockchain should not adhere to the governance rules of the older financial markets that have been wrought with corruption at higher levels to begin with. This is a technologic revolution. It is not the industrial revolution. Granted this is an easy way for the government to channel money into as many regulatory companies as they can. But that is a petty , corrupt, short sighted approach that will cause rioting in the streets and wreak havoc in the hearts of our fintech community. The government hopes that people will either not be educated enough to know better or they will have no choice because it seems our president can dictate laws to us regardless of whether we agree or not.
They go on to say, "If Etherium and XRP are deemed securities, cryptocurrency exchanges and general industry promoters or foundations, or anyone who sold or evangelized projects like ethereum to the general public, could be subject to legal penalties."
"If you do an issuance now, in April 2018, do it under U.S. securities laws," said Gensler, who is now a senior lecturer at the MIT Sloan School of Management, "It's better to bring it into a public policy framework, even if there's a little bit of a chill."
"The Ethereum Foundation offering had a 50 percent appreciation right in the first 42 days written into the offering," Gensler said on stage. (The industry think tank Coin Center in Washington, D.C. promptly issued a statement that "ether is not a security," rebutting Gensler's argument.)
Meanwhile, for issuers of new tokens, it's almost impossible to walk the line, even with more feedback from regulators and lawyers. Pangeacoin, and the The Cryptocurrency and Blockchain Legal and Regulatory Task Force are here to help. Get in touch with both of these sites and feedback, feedback, feedback !
