United Arab Emirates SCA Plans New ICO Security Token Regulations
UAE Ready To Regulate Initial Coin Offerings with a New Plan
The UAE securities and commodities regulator has decided to approve a plan to regulate initial coin offerings (ICOs) in the country. The main intention is to recognize tokens as securities. After analyzing the measures taken by other countries, UAE changed its position regarding ICOs.
UAE Approves New ICO Regulations
In order to control the market, the UAE Securities and Commodities Authority (SCA) approved a new plan to regulate ICOs. Moreover, with the latest rules, tokens issued through this crowdfunding method will be considered securities. The information has been released during the weekend by the agency’s chairman Sultan bin Saeed Al Mansouri. Mr. Mansouri works as Minister of Economy of the United Arab Emirates.
The decision taken has been widely analysed after reviewing a study that covered best practices in the space around the world. Quoted by WAM news agency, the SCA’s chief said that they want to regulate digital securities and commodities.
With these regulations, the financial and cryptocurrency system receive an upgrade in the country. Additionally, the UAE wants to match the best international standards and practices followed by other countries.
In the past, the SCA warned investors about investing in the ICO market. Most of the tokens issued by these companies are very volatile. Several ICOs that are launched do not keep their roadmap in the next months.
Furthermore, the regulatory agency explained that ICOs are speculative investment and that the price of the tokens issued may change drastically in very short periods of time. Now, with the latest regulations, ICOs find a clear framework where to operate. Investors will also be more protected knowing that the SCA is controlling the space.
Other countries are also regulating the ICO market. South Korea, for example, as well as China, have taken very hard measures against ICOs. Both countries banned ICOs from operating in their territories.