The government-supported Crypto Valley Association (CVA) in Zug, Switzerland has laid down a code of conduct to protect both ICO investors and businesses alike. The country is second only to the UK for capital raised via an ICO crowd sale mechanism within Europe.
The initiative differs from the usual attempts at creating a cryptocurrency policy framework because it is largely driven by the crypto-community itself rather than a statutory authority.
New Guidelines Tackle “Need for Clarity”
The non-profit organisation is providing guidelines for new ICO launches to adhere to in order to reduce unethical practices within the sector and provide interested parties with detailed terms and conditions about the investment opportunities.
Notably, the code specifies that these details should be written in such a way so that a non-technical layman who is new to digital assets and the blockchain could understand them.
It goes on to emphasise the need for clarity when describing the function, legal framework and tax implications of any token associated with an ICO.
Luka Müller, Chair of the Policy & Regulatory Working Group of the CVA said that, “Because of the rise in popularity of ICOs, new categories of contributors participate who are often unaware of the true nature of their investment, and the documentation published to accompany token launches often minimises or ignores the associated risk.”
In addition to the guidelines for the public, the CVA has also produced advice for the hundreds of corporate and individual members of the Association on how they operate and conduct themselves within the industry.
Whilst the guidelines themselves are not legally binding without a signature, each signatory to the charter will be asked to make a declaration to reaffirm their agreement on an annual basis and, if found to have breached the guidelines, will face disciplinary action.
Switzerland has been leading the charge in recent months in terms of creating formal, legal frameworks for cryptocurrencies, with at least three of its cantons [local administrative entities – Ed] now known to be accepting Bitcoin for settling tax payments.