Earlier this week, Stanford Law School released a report finding that U.S. class action lawsuits related to initial coin offerings (ICOs) are set to double in the next few years. According to the report, there have been 12 class action lawsuits related to ICOs since 2016, alleging abuse due to a lack of accountability and failure to adhere to securities laws. ICOs also appear to be under increasing scrutiny abroad. Switzerland's Financial Market Supervisory Authority recently launched proceedings against blockchain startup Envion AG, alleging that the company breached financial market laws during a January 2018 ICO that raised almost $100 million through the acceptance of nearly 100 million Swiss francs. The Swiss regulators are investigating whether Envion may be in violation of Swiss banking laws. The risk of fraud in the ICO industry was further highlighted by recent reports of an online ICO white paper writing service that apparently seeks to commoditize white paper writing for startups looking to launch ICOs.
Two recently released publications seek to provide guidance on the legal status of ICOs. The Chamber of Digital Commerce, along with the Token Alliance, released a report titled "UNDERSTANDING DIGITAL TOKENS: Market Overviews and Proposed Guidelines for Policymakers and Practitioners." Additionally, the Stanford Journal of Blockchain Law & Policy published an article that discusses the top 25 ICO jurisdictions and evaluates the related regulatory activity taking place in those jurisdictions.
For more information on blockchain and ICO lawsuits and regulation, see the following:
- Federal Class Action Lawsuits Against ICOs Are Set To Double
- Swiss Regulator Set to Launch Proceedings Against ICO Issuer
- Swiss Markets Authority Investigates Troubled $100 Million ICO
- Blockchain ICO White Paper Writer
- Token Alliance White Paper: Understanding Distributed Tokens
- Initial Coin Offerings: The Top 25 Jurisdictions and their Comparative Regulatory Responses
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