ICO regulation varies substantially from a country by country. In many nations, ICO regulation is still being developed. Hence, in some jurisdictions, ICOs fall in a legal grey zone. Some regulators support and encourage ICOs while in other countries they are banned as a risky investment due to many ICOs being a scam.
Below is a list of ICO regulations in several of the important cryptocurrency hub countries.
In the united states of America, ICO regulation can be different in various states although it is generally very strict. The SEC considers all tokens security, therefore all ICOs fall under the same category as other investments and need to adhere to AML/KYC practices.
ICOs are allowed in the European Union, even though they are regulated relatively strictly. All ICO projects must adhere to AML/KYC practices and have business regulations and licenses required in the field of work of a particular project. As such, an ICO company making a banking product is required to have the same permits as a fiat bank would.
The United Kingdom currently categorizes altcoins as “Private Currency,” or in other words, a currency that can only be spent within a project or business. ICOs are able to take advantage of this but not for much longer as propper ICO regulations are currently being developed.
SImilar to the United Kingdom, ICOs are currently allowed in Japan. However, The Financial Services Agency is now working on regulations that will reinforce the requirements for ICOs to adhere to the KYC/AML practices.
China regulators have comprehensively banned all ICO projects while requesting businesses that have already conducted a successful ICO to return all funds to investors.