ICO Certification System of EMSCOMM

May 11, 2018 5:46 pm Last Updated: May 18, 2018 10:07 am

The Electronic Money Supervisory Commission has recently announced that it will implement the ICO certification system for the first time in Europe in May, getting so much attention from the industry. So far in the cryptocurrency market, all the scams in the form of ICO or ICOs done by a company that has not been equipped with technology became a social problem.

Cryptocurrency, represented by the product of a new technology called block-chain, has attracted attention as a new growth engine that will lead the future causing craze all around the world. However, criticism arises on the issue that there isn’t any system that can protect investors from any risk.

Ten years have already passed since Bitcoin appeared in the world by an unknown programmer named Satoshi Nakamoto in 2009. Today, thousands of cryptocurrencies are being traded on the market, but authorities and related agencies are still unable to take effective measures and just watch over the market.

In contrast to the IPO of the stock market, the investment recruitment called ICO are in serious condition. According to statistical data, the number of ICOs increased from 7 from 2015 to 43 in 2016, and to 343 in 2017. The number of ICOs reached up to 202 by April this year. In addition, the total amount of money raised through ICO is $ 9,000,000 in 2015, $ 256,000,000 in 2016, and $ 5,482,000,000 in 2017. The funds raised by ICO by April this year already exceeded $ 6,330,000,000. Even for the last year of 2017 and this year alone, about 28.6 ICOs a month were made in 2017, which raised about $ 457,000,000, and this year the number of ICOs per month was more than doubled and the money recruited was more than tripled.

The ICO market is growing at a tremendous pace, but for general investors participating in the ICO, it is not easy to understand the basic paper, the white paper, as well as to verify the technological capabilities of the companies conducting ICO.

(EMSCOMM)

The severity of the situation becomes even clearer when compared with the IPO that is done to raise money in the stock market. In the case of IPO, the number of years of operation for the issuing company, the amount of capital and the number of listed shares, the data on sales revenue, the financial details, the opinions of auditors, the history of bankruptcy, the fact of agency services on company transfer, and whether the sovereign right is unified are all thoroughly reviewed according to the law. In contrast, ICO, which attracts more investors and lager amount of money, does not have any standard or institution, nor does it have a supervisory agency. As a result, there are so many ICOs, which aims to attract investors easily, so the size of damage of general investors is getting bigger. Moreover, since there is no way to know whether companies are actually investing in technology after ICO, it is obvious that the number of victims will be getting bigger as time goes by.

Under such a gloomy market situation, Electronic Money Supervisory Commission (EMSCOMM) has been preparing ICO certification system from the second half of 2017, which will select and support ICO companies that have the ability and willingness to develop cryptocurrency based on differentiated ideas and outstanding technology. The news has attracted many investors from all over the world.

EMSCOMM’s ICO certification system is not merely to select and certify excellent companies, but it also features continuous supervision and support after ICO. Two of the senior members of EMSCOMM, composed of scholars with the highest authority on cryptocurrency, are selected as advisors of each certified company in such a way as to supervise and support the whole process from the development stage to the business operations. It is expected to play a pioneering role in the settlement of the ICO system.

In order to standardize and establish this ICO certification system, EMSCOMM held a regular forum led by EMSCOMM senior member Jeffrey Miron, a Professor of Harvard University, and Pierre Picard, a Professor of Luxembourg University. In the forum, they would discuss the issue with the authorities from related institutions of the world, starting in Europe. It is hoped that EMSCOMM’s ICO certification system, which is first implemented in Europe in May, will serve as a minimum safeguard to protect investors participating in ICO by fostering the right path while stabilizing the cryptocurrency market.

 

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