- Jason Hsu, a Taiwanese lawmaker, has proposed that Taiwan set up a new category for security tokens
- The proposal also calls for a proper definition of what constitutes a security as well as new ICO laws
- If accepted, these changes should be in place by mid-2019
One of the most complex parts of blockchain and cryptocurrency adoption is how exactly to categorize them when it comes to taxes and business practices.
Just a few days after it was reported that Taiwan would be introducing new legal frameworks for ICOs, it has been revealed that a Taiwanese lawmaker Jason Hsu is pushing for new regulations that will help the development of the blockchain and cryptocurrency industry in Taiwan.
One of the most important suggestions in the document that was published on Friday the 26th of October 2018 was that new regulations be set up on initial coin offerings (ICOs) and also that Taiwan’s Ministry of Economic Affairs designates a new business category and laws for security tokens.
These new guidelines should be in place by June 2019 says the document and should also clearly define what qualifies as a security.
Why this is needed
Concrete regulations and categorization for DLT-related assets have been a bone of contention in many parts of the world.
Therefore, there is an immense benefit in the creation of a new category and laws for security tokens. Because blockchain technology is so new, it often has a hard time fitting in with other business categories that it is often thrown into.
This has also led to a lack of trust from the public, many of whom are already skeptical about anything blockchain-related.
By creating a new category for security tokens, laws can be made from scratch with less friction and confusion.
This will also breathe in new life to security token Offerings (STOs) which will, in turn, help businesses raise capital more effectively and also help investors feel safer giving capital to businesses through this avenue.
There is also the issue of setting up are regulations on ICOs. ICOs have had a bit of a controversial year with the Securities and Exchange Commission (SEC) in America shutting down a number of them this year, some for not following guidelines and there have even been cases of ICOs actually being fraud schemes.
One of the reasons for this is the fact that the ICO industry has experienced a lack of proper regulations.