Vitalik Buterin advises to ignore ICOs with volume bonuses

Co-founder of Ethereum, Vitalik Buterin is considered that ICOs offering volume-based bonuses contradict the idea of cryptocurrency and should be ignored
21 November 2017   424

Vitalik Buterin talked against ICOs that offer volume bonuses in his Twitter and asked users to ignore them.

Co-founder speaks that the main idea of cryptocurrency is to build the economy based on equality and fair without such so-called few that holds all the wealth.

Initial Coin Offerings raise more than $3 billion on their projects this year.

ICOs and token sales usually offer some time and volume-based bonuses. Buyers often get extra coins in the early stages of sales.

One Twitter user reproached Vitalik Buterin’s tweet because Etherium ICO also offered bonuses.

Vitalik answered that those time-based bonuses were acceptable but nevertheless he disagree with all the decision Ethereum ICO made in 2014.

The main idea of ICOs was to help skillful teams with their great ideas to get through easily, but it didn’t become a trend, especially by teams which couldn’t raise their funds using traditional methods.

Also the discussion began about the transparency of operations, fund usage and achievements teams working on projects got. In contradistinction to original companies and startups, ICOs are not the ones which can be regulated and few token holders can say about how such project progress.

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Swiss Regulators Published ICO Guidelines

The Swiss Financial Market Supervisory Authority FINMA published today initial coin offering (ICO) guidelines  
16 February 2018   156

The guidelines set out how it intends to apply financial market legislation in handling inquiries from ICO organizers. According to it, regulators will oversee and regulate ICOs anti-money laundering laws.

FINMA clarifies how token issuers should proceed in the country. The regulator also stated that there is a sharp increase in the number of Switzerland-based ICOs. This led to questions about applicable regulations.

The press release noted that financial market law and regulation aren’t applicable to all ICOs. Each case must be decided on its individual merits.

The regulations will be based on economic function and purpose of the tokens issued by the ICO organizer. Due to the fact that there is no generally recognized terminology for the classification of tokens in the world,  FINMA categorizes tokens into three types:

  • Payment tokens are synonymous with cryptocurrencies and have no further functions or links to other development projects.

  • Utility tokens are tokens which are intended to provide digital access to an application or service.

  • Asset tokens represent assets such as participation in real physical underlyings, companies, or earnings streams.  

FINMA will handle ICO inquiries according to three different categories, based on the type of tokens they’ll be issuing.

  • Payment ICOs (payment tokens), that issue tokens that are transferable and function as means of payment.

  • Utility ICOs (utility tokens), that will not qualify as securities, as long as their purpose is to confer digital access rights to an application or service. If a utility token functions as an investment in economic terms, it will be treated as a security.

  • Asset ICOs (asset tokens), that issue tokens that will be seen as securities. This means they’ll be treated like equities or bonds. These will be subject to strict requirements.

Our balanced approach to handling ICO projects and inquiries allows legitimate innovators to navigate the regulatory landscape and so launch their projects in a way consistent with our laws protecting investors and the integrity of the financial system.

Mark Branson

FINMA CEO