Financial Technology Law: 'Understanding ICOs and the Legal Risks Surrounding Them and Developing a Legal Framework for Classification of Cryptoassets and Their Regulation'

Abstract

The initiation of the fourth industrial revolution along with its correlated financial and technological innovations like cryptoassets in today’s financial markets, coupled with technological development and innovativeness, is bringing us closer to complete, total and true global interconnectedness. These cryptoasset markets although reasonably new, are evolving fast and furiously and have the potential to disrupt current financial markets and transform the future ones to come. As a product of these financial and technological innovations, Initial Coin Offerings have emerged in which cryptoassets are issued with the aim of raising capital from investors, divergent from traditional venture capital systems. However, new questions pertaining to the regulatory perimeters and classification of cryptoassets for regulatory purposes remain somewhat unanswered. In light of these circumstantial developments, this paper puts forth submissions proposing for the regulation of numerous cryptoassets which at present, remain unregulated, after analyzing and conducting a comparative study substantiating the differences between the US and UK regulatory architecture. Further, a new proposal for development of a framework for cryptoassets predominantly for regulatory purposes has been constructed. This is crucial because this sanctions the ability for the pertinent regulatory requirements and legislative rules to be clearly and readily identified, after having truly and correctly classified the cryptoasset involved. Lastly, propositions and recommendations in regards with work to be carried out in the near future are put forth along with submissions advocating statutory and regulatory amendments to the currently existing legal architecture in place.