The Chamber of Digital Commerce’s (CDC) industry initiative has released a comprehensive report outlining guidelines for the token ecosystem and initial coin offerings (ICOs).
The report, Understanding Digital Tokens: Market Overviews & Guidelines for Policymakers & Practitioners[1], was prepared by the Token Alliance, an industry-led initiative of the CDC. Comprising of more than 350 global industry participants, the Alliance is seen as a key resource for the emerging industry surrounding the generation and distribution of tokens using the blockchain.
Over the last 24 months there has been significant growth within the industry. Yet in that time the market has seen a rise in the number of ICOs. Of course, while token projects have helped to raise capital for various companies they have also highlighted strengths and weaknesses in the industry. As a result, debates as to whether a token is a security[2], and when it’s not, are currently underway.
Bitcoin and Ether aren’t securities, but are considered as commodities[3], according to the U.S. Securities and Exchange Commission (SEC). If a token meets certain criteria, though, such as offering an expected rate of return or a potential for growth in value then it could be deemed a security. If that’s the case, it would need to follow regulations set by the SEC for the issuance and distribution of securities.
In a bid to answer the needs of the community, the Token Alliance was formed, with the aim of helping market participants navigate their way around the industry and to ensure that they act in a fair manner toward potential investors.
“These industry-developed principles are an important tool for responsible growth and smart regulation that strikes the right balance between protecting investors while allowing for innovation in this new technological frontier,” said Paul Atkins,
