A group of sixteen blockchain startups has announced the launch of Project Transparency, a new self-regulated initiative aimed at improving regulatory procedures in the cryptocurrency sector. The announcement was made during an ICO summit that started in Vienna on Monday.
The initiative is represented by sixteen industry players, including Santiment, Aragon, Cofound.it, District0x, Encrypgen, Etherisc, Hcash, Iconomi, Indorse, Lykke, Dappbase, GATCOIN, IconiqLab, Virgil Capital, Musiconomi and Maecenas. Their total valuation is more than $650 million, according to the press release.
“With the rapid rise of digital currencies and proliferation of ICOs, investors increasingly want security regarding their funds and transparency on how they are administered,” said Maksim Balashevich, CEO of Santiment, the company which announced the project.
“Santiment was developed to provide insight and transparency to investors looking to enter illiquid and highly volatile markets, Project Transparency affirms our commitment to improving governance in the Blockchain sector”.
Santiment will provide funding for Project Transparency’s web page and for manpower to process applications and keep the initiative staffed. Any blockchain startup will be able to join the initiative and the only requirement is to disclose the wallets controlled and explain any expenditures over 0.5% of the funds collected.
Taiyang Zhang, CEO of pre-ICO project Dappbase, and GATCOIN’s founder, Simon Cheong, explained that their decision to take part in the project is due to their imminent funding goals and investor interest: “Transparency drives better, sustainable business. And that’s what we want.”
The new project comes amid an increased scrutiny from regulatory authorities in China and South Korea. Last week, the South Korean Financial Supervisory Service (FSS) announced a ban on raising money through all forms of virtual currencies. The move is expected to improve security for investors and prevent the risk of financial scams.
In September, the People’s Bank of China declared that all ICOs are illegal and warned that it will strictly punish such fundraising-related activities in the future.
However, a few days after the announcement was made by the country’s central bank, Hu Bing, a researcher at the Chinese government-supported academic research organization, claimed that the ban is temporary and that ICOs will be relaunched once regulatory frameworks and policies to protect investors are developed by regulators.
Project Transparency is not the only initiative undertaken lately to protect investors from the risk of fraud. Last month, Crypto Valley Association, the Switzerland-based not-for-profit government-supported association, unveiled plans to establish ICO Code of Conduct to ensure safety of token sales.
According to the President of Crypto Valley Association the rapid growth of ICOs has raised concerns around security of this funding method. “The widespread adoption of this framework, combined with careful supportive regulation would bring stability to an exciting but uncertain trend in blockchain.”