Guidelines aim to encourage ‘responsible’ growth of token market

The Chamber of Digital Commerce, a trade association for the digital asset and blockchain industry, has launched a set of guidelines that aim to shape the responsible growth of the token and initial coin offering (ICO) markets.

Developed by the association’s industry-led initiative Token Alliance, the first edition of the guidelines focuses on so-called “utility tokens” – services or units of services that can be bought and which fund projects of shared infrastructure. Token Alliance says these tokens are “an aspect of the token economy fighting to be recognised”.

“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,” says Paul Atkins, CEO of Patomak Global Partners and former Commissioner at the Securities and Exchange Commission.

The report provides an overview of the regulatory environment and securities law as it relates to tokens in the US, Canada, Australia, the UK and Gibraltar. It also includes industry-developed principles for token sponsors and trading platforms to promote sound business practices and minimise unintentional regulatory risk.

According to the report, startups raised more than $7.3 billion (£5.6 billion) via token issuances in 2017, up from $100 million (£76 million) in 2016. The industry is expected to grow dramatically as cryptocurrency adoption becomes more prevalent and reaches the mainstream.

Perianne Boring, Founder and President of the Chamber of Digital Commerce, claims the guidelines are “a strong step towards self-governance and a powerful tool to help builders and investors create a responsible and successful industry.”