Throughout most of 2017 there was little to no proper regulation or oversight in the ICO sector. This has been changing gradually, with errant ICOs being shut down a lot more quickly and frequently as of late, and most governments having ICO regulations in the pipeline.
On Friday, Lithuania became one of the first countries in the EU to provide clarity on launching ICO projects, or sales of virtual tokens, according to a document released by the Lithuanian finance ministry.The likes of Estonia and France have also been up there at the forefront of this movement.
The government, through the finance ministry, hopes the guidelines on how Lithuania treats businesses raising funds through ICO projects, will attract investors and entrepreneurs to the Baltic country.
We should make our efforts for Lithuania to become the main headquarters for those ICO project promoters which are willing to operate in a transparent and orderly legal environment,
– Said the Minister of Finance Vilius Sapoka in the document.
What the Guideline Offers
The guidelines cover regulatory, corporate, indirect taxation, corporate taxation, accounting and anti-money laundering guidelines for ICO projects.
There are also detailed descriptions provided about what types of tokens will be considered to be securities and therefore will be subject to the legislation regarding instruments on the financial markets. This is a hot topic in the ICO world today, so it is certainly a key area of interest. There are also details provided as to what sort of taxes funds raised via these token sales will be subject to. The document shows that a variety of financial regulations will apply if a token grants profits or governance rights.
Coindesk reports that the efforts by the Lithuanian government to attract ICO projects to the country comes as many Lithuanian ICO projects are launched using entities registered in Gibraltar, Switzerland and the Virgin Islands.
Lithuania, a small Baltic State with a population of less than 3 million, has managed to gain a foothold in the global ICO market, which is unregulated. In 2017, Lithuanian ICO projects raised more than 400 million euros (470 million U.S. dollars) worldwide, according to the Lithuanian finance ministry, which reported:
It takes up to 10 percent of total world market,
The Central bank of Lithuania recently said that ICO projects managed by Lithuanians have raised at least 250 million U.S. dollars worldwide in the first three months of this year.
Although the ministry states that the framework is not a formal piece of legislation, the effort aims to bring transparency to the industry so that ICOs can grow in a regulated environment. The document also calls for contributions from industry actors to make the guidelines more formidable.
Image Credit: Deposit Photos
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