Russian Regulator Runs Test ICO in a Sandbox, Says Legal Issues Remain
Earlier this week, Russia’s Central Bank ran a test ICO in a sandbox, saying that while it was a successful trial, many legal issues remain unresolved.
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Test ICO in a Sandbox With Sberbank’s Help
Ivan Semagin, deputy head of the regulator’s financial market development department was quoted by state-run news agency TASS as saying that the test ICO “ran successfully on the technology side.”
He provided no further details of the test ICO. According to earlier reports, the Central Bank’s intention was to host an ICO of Level One, a company that provides lecture services, with the participation of Sberbank CIB, the investment banking and asset management arm of Russia’s largest, state-run lender Sberbank, and the National Settlement Depository (NSD).
The Central Bank launched its sandbox in April 2018 to test new financial technologies, including blockchain and cryptocurrencies, in a bid to produce matching regulations as the government announced digitization as one of the top priorities for the country’s development.
At the time, the regulator said the sandbox tests will be carefully studied in collaboration with government agencies and other relevant institutions.
More Testing to Come
“Based on the testing of a pilot service, relevant amendments will be made to the Central Bank’s regulations to make sure that all participants in the financial market will be able to use new technologies, improving their customer care and cutting operational costs,” the regulator announced last month. Roughly two dozen pilot projects are scheduled to be run in the sandbox over the next few months.
Still, legal issues pertaining to ICOs remain unresolved, Semagin admitted, again providing no specifics. Apparently, the regulator cannot go ahead and introduce regulations on the ICO procedure before a framework legislation is adopted at the national level.
A draft law on cryptocurrencies was prepared a few months ago, but faced substantial criticism from the local crypto community for being excessively restrictive–to the point of threatening to make Russia a crypto-unfriendly state.
The draft is still being revised, and it remains unclear when exactly it might be adopted. The July deadline for establishing crypto regulation in the country, set by president Vladimir Putin, has been missed.
The current draft stipulates that ICOs can only be conducted under the auspices of authorized institutions to ensure investor protections.
Currently, no regulations regarding ICOs are in place in Russia, with hundreds of local companies opting for that funding model, with the proportion of scam and poorly prepared projects estimated to be high.
Sound off below. Is Russia moving ahead in a sensibly cautious way by running a test ICO in a sandbox, or losing ground to other jurisdictions?
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