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Regulations around initial coin offerings (ICOs) and cryptocurrencies including Bitcoin should be flexible enough to enable them to be regularly updated as regulators gain a better understanding for the sector. So says cryptocurrency expert David Orban.
Regulations on cryptocurrencies and ICOs differ from country to country, with some like Korea and China having banned ICOs and others such as Russia and France planning to bring out regulations on cryptocurrency (see this Bloomberg story published yesterday). Bitcoin and other tokens are not regulated in South Africa.
Speaking by telephone from an event held today the Cape Town International Convention Centre (CTICC) by SA fintech startup Wealth Migrate, Orban said the concept of ICOs and token sales is evolving rapidly.
Cryptocurrency export David Orban says regulators should allow regulations to evolve as they gain a better understanding for the sector
Orban is an advisor and investor in numerous blockchain companies and funds including South Africa’s The Sun Exchange, and Wealth Migrate itself. He is also an advisor to the Singularity University in the US.
He described the job that regulators have in assessing the legality of cryptocurrency transactions as “not viable”, because they are “appointed to do something almost impossible, to take into consideration something that has not been completely analysed yet”.
He added that at present in the US the view on cryptocurrencies depends on who you speak to, whether it’s the Internal Revenue Services (IRS) or Securities and Exchange Commission (SEC). “Bitcoin is interpreted by different parties (differently) depending on who you speak to,” he said.
And what of the mistrust many have of Bitcoin and Ethereum and other tokens? Orban likened the uncertainty that many have in cryptocurrency similar to someone a few hundred years ago trying to convince someone else that a paper note is legal tender, even though it doesn’t have any gold in it.
“If I thought that Wealth Migrate and (The) Sun Exchange were a scam I wouldn’t be involved in them,” he added. He said both are run by “passionate and honest” entrepreneurs who have “executed on real businesses”.