On July 30, 2018, Washington, D.C., CDC Token Alliance released the first edition of an extensive set of guidelines to assist in structuring the responsible growth of the token and initial coin offering (ICO) markets with the approach of supporting the self- regulatory system.
The Chamber of Digital Commerce (CDC) is an American advocacy group that promotes the emerging industry behind blockchain technology, bitcoin, digital currency and digital assets Headquartered in Washington, D.C., the organization was founded in July 2014 by Perianne Boring.
“Understanding Digital Tokens: Market Overviews & 1st installment of Guidelines for Policymakers & Practitioners” is a collaborative and outlined report to be used as a resource amongst industry innovators, investors, and policymakers which will addresses the “utility tokens,” an aspect of the token economy fighting to be recognized.
Paul Atkins, CEO of Patomak Global Partners and former U.S. Securities and Exchange Commission (SEC) Commissioner, during the press release, stated favoring smart regulation guidelines, “to maintain the right balance between protecting investors while allowing for innovation in this new technological frontier it is necessary to adhere.”
Further, he said, “we think it is important to explain the unique attributes of blockchain-based digital assets, which are not all strictly investment based, and provide guidance to consumers, regulators and the industry.”
The report emphasizing three parts:
The first exclusively look at the regulatory environment and securities law as it relates to the U.S., Canada, the U.K., Australia, and Gibraltar.
The second spotlights on the principles and guidelines for utility tokens while promoting sound business practices that shrinks an unintentional regulatory risk.
The third segment conveys to the token economic landscape and features the trends in token project fundraising events from 2013 to the present.
According to the study, in 2017, through token issuances startups raised over $7.3 billion, up from $100 million in 2016. However, even though Q1 2018 saw a dip in the number of token sale events compared to Q4 2017, from over 300 to around 220, the number of funds raised saw a near 50 percent increase to $6.5 billion for the quarter. Some of the incidences highlighted by the report and significantly shown the cases of earliest fundraising events which were significantly small compared to those that took place during 2017 and the first quarter of 2018.
The CDC and the Token Alliance are aiming to open the doors to innovative thinking and understanding in the token ecosystem. The industry is both diverse and frequently developing towards decentralization. With the proper tools and frameworks in place, it will be able to support a self-regulatory approach for the potential multi-trillion dollar industry which is crucial for the ‘Responsible’ Crypto Market Growth while navigating the entire token landscape towards the progressive ecosystem.