A Malaysian regulator issued a cease and desist order to the team behind the Copycash ICO, as regulatory agencies all over the world continue the crackdown trend on ICOs.
Earlier this week, the Malaysian regulatory authority, the Securities Commission (SC), announced that they issued a cease and desist order to the Copycash Foundation. This order requires that the company immediately halt any activity, which includes a scheduled initial coin offering (ICO) that was scheduled to start on 10 January.
The SC-issued order details all activities mentioned in Copycash’s whitepaper, such as plans for promotional events, roadshows, and seminars, and strictly prohibits the firm from pursuing these activities within the Malaysian border. According to the regulator, the cease and desist order was issued shortly after an investigation which suggested that the claims made in the company’s ICO whitepaper are in conflict with current regulatory policies and securities laws.
A quick glance at Copycash’s website suggests that the company seems tailored to appeal to the Chinese market more than other investors. If this is true, the cease and desist order will not impact the ICO, as they are still free to launch campaigns in countries other than Malaysia.
So far, Copycash has not yet commented on the cease and desist order or its effects.
The SC has exercised notable restraint when it comes to the ICO industry. Previously, the regulator warned potential investors to research any ICO before investing and to generally practice caution when navigating through the relatively new industry.
The regulator also seems committed to their task of monitoring the industry for any suspicious activity. The SC noted that they will continue to monitor and facilitate all transactions in the digital asset industry, especially since, according to the regulator, the industry is particularly fraught with heightened risks. The regulating agency concluded that will take action where necessary.
In September 2017, the SC made their attitude regarding ICOs abundantly clear when they released an official statement regarding the risks and scams associated with ICOs. The statement lists a host of issues commonly experienced in the industry.
More importantly, the statement emphasized that due to the difficulty of verifying an ICO’s authenticity, it could hinder the recovery of invested funds if an ICO turns out to be a scam, especially if the ICO is outside of Malaysia, as the funds then fall under foreign laws.
The statement adds that any ICO-issued tokens which are traded on other markets increase several risks such as opaque pricing and insufficient liquidity. These factors, according to the SC’s statement, make it difficult for any government to offer investors protection in the case of ICO scams. The statement concluded by also expressing their concerns about illegal activities associated with ICOs such as terrorist funding and money laundering.
