The publication quoted plans from Wellington Koo, chairman of Taiwanese finance regulator — the Financial Supervisory Commission (FSC) — who was speaking at a meeting of the Legislative Yuan Finance Committee.
“The more we regulate, the more this new economic behaviour wanes,” he told members of the meeting on Oct. 22.
ICOs have created tension throughout international jurisdictions keen on avoiding consumer exposure to fraud. Locally, mainland China has banned the practice altogether, a move which has also been in force in South Korea since September of last year, but which may now see a reversal.
Taiwan initially opted to use existing anti-money laundering legislation
Last October, however, Taiwan conversely opted not to directly regulate either cryptocurrency or ICOs, while in April of this year authorities confirmed they would use existing anti-money laundering (AML) legislation to govern the industry.
Despite Koo’s statement on ICO regulation, Taiwan nonetheless does not plan on ‘curbing the creativity and productivity associated with cryptocurrencies’, the Taipei Times continued, provided they do not constitute securities.
The draft is to be completed by June next year, he told a meeting of the Legislative Yuan’s Finance Committee.
Koo made the remarks after Chinese Nationalist Party (KMT) Legislator William Tseng (曾銘宗) said at a question-and-answer session on whether the government would regulate ICOs.
To conduct an ICO, businesses typically post a white paper on the Internet that outlines their ideas on token use, issue requirements and expected growth before offering virtual tokens for sale.
81% of ICOs identified as scams
However, 127 white papers worldwide were found last year to have been faked and as of April, 80 papers were found to be inaccurate, Tseng said. Citing data from ICO advisory firm Satis Group, Tseng said that 81 percent of ICOs have been identified as scams.
However, without referencing the standards of other countries, it would be difficult to draft standards for ICOs, Tsai said.
The government tends to regard cryptocurrencies as virtue commodities or assets rather than currencies, because they have no intrinsic value, central bank Governor Yang Chin-long (楊金龍) told the committee, explaining why the commission should be responsible for regulating ICOs.
The commission said it has helped prosecutors investigate three cases of suspected ICO fraud.
One of the cases involved a private company advertising that coins could be exchanged for equities, which might have violated the Securities and Exchange Act and the Banking Act, the commission said.