Enhancing consumer & investor protection from ICO scams

Enhancing consumer & investor protection from ICO scams


POINT OF VIEW

We think that maybe the International Organisation of Securities Commissions (IOSCO) or other international organisations should try to promote more harmonisation or a more common global response to determine the applicable law for an Initial Coin Offering (ICO).

Aurelio Gurrea-Martínez

Assistant Professor of Law


In brief

  • The rise of new technologies is changing the way companies raise funds. Along with the increased popularity of crowdfunding in recent years, a new form of funding has emerged – the use of Initial Coin Offerings, or ICOs.
  • ICOs generate many challenges for securities regulators and give rise to other issues, including corporate governance, data protection, anti-money laundering and insolvency.
  • Researchers suggest a regulatory framework that seeks to improve the attractiveness of ICOs as a fundraising method for individuals and firms while reducing the risk of opportunism of promoters vis-à-vis stakeholders.

The rise of new technologies is changing the way companies raise funds.  Along with increased popularity of crowdfunding in recent years, a new form of funding has emerged – that is, the use of Initial Coin Offerings, or ICOs.  In 2017, companies in the United States raised over $4 billion through ICOs; in 2018, more than $21 billion was raised.  ICOs generate many challenges for securities regulators and also give rise to other issues including corporate governance, data protection, anti-money laundering and insolvency.

Assistant Professor Aurelio Gurrea-Martínez from the SMU School of Law has conducted legal research on financial regulation.  In this podcast, he shares his recent comparative and interdisciplinary study which addresses the issue of ICOs and makes recommendations to regulators and policy makers in a way that aims to promote innovation and firms’ access to finance without harming investor protection, market integrity and the stability of the financial system.

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Inside the mind of

Aurelio Gurrea-Martínez serves as an Assistant Professor of Law at Singapore Management University. His research focuses on Corporate Insolvency Law, Business Restructuring, Corporate Governance, Capital Markets and Financial Regulation, Law and Finance and Fintech. He is also Head of the Singapore Global Restructuring Initiative at the SMU Centre for Commercial Law in Asia.