Research On The Legal Regulation Of Initial Crypto-Token Offering(ICO)

In the past few years when blockchain and virtual currency have gradually integrated into social topics,Initial Crypto-token Offering(ICO)has emerged as a new type of financing.Regulators once deregulated financial markets in order to encourage innovation and promote structural reforms of the economy,causing ICO to spread like a flood.What followed was the breeding of high-risk and criminal behaviors,which led to the change of regulatory authorities'attitude towards ICO from inclusive to conservative.In 2017,China unveiled a"killer app"for ICO,banning ICO completely.However,ICO in various forms is still difficult to prohibit,how to further regulate ICO is still an unavoidable problem.Beginning with recent three cases of ICO mega scam,the author elaborates ICO regulation problems faced by China to pave the way for the following research.First,the author introduces the concept of ICO,compares it with IPO and equity-based crowdfunding,and sorts out the operation mode,classification and characteristics of ICO in the study of the basic principle of ICO legal regulation.Then,the author discusses the legal nature of ICO and the crimes of illegal fund-raising that may be involved.After that,the author analyzes four types of potential risk to illustrate the necessity of the regulation,based on the risk control theory.Secondly,in the analysis of the current situation,rationality and problems of ICO legal regulation in China,the author clarifies the regulatory thinking of"Announcement on Preventing the Financing Risks of Initial Coin Offerings”and the reasons for prohibition of ICO in China,then points out the problems of current regulations.Thirdly,the author summarizes the practical experience and enlightenments of ICO regulation in other countries,including the comprehensive prohibition mode represented by China and Korea,the mode of incorporating into the current legal regulations represented by The United States and the mode of financial sandbox represented by the UK.The author also takes the case of The DAO as an example to elaborate the regulatory system of The United States.Finally,the author explores how to further improve the system to regulate ICO problems and suggests that regulatory authorities should clarify the civil,administrative and criminal liabilities of the sponsors,third-party platforms and investors in illegal ICO financing activities,so as to ensure the security of financial market transaction.