After a long time, it could finally be possible that the ICO industry is warming up to the idea of self-regulation. The highly volatile and ever-growing crypto funding industry has been under the strict vigilance of regulatory watchdogs the world over. A solution mooted by Ryan Selkis is the creation of Messari, a universal token that has the potential to regulate all other tokens.
One Token Registry to Rule Them All
At present, there are no laws that govern the ICO industry. Due to the global nature of these coin offerings, it becomes challenging to regulate them. On the other hand, these startups are booming, and as a result, the amount they are raising in each new offering is also increasing. As such, the SEC has already issued a warning flag highlighting the risks of investing in the highly volatile cryptocurrency and ICO industry.
SEC chairman, Jay Clayton, clarified that he sees ICOs as any other securities offering and hence, they must also follow the same due compliance. All these warnings have pressurized ICO industry thinkers and leaders to find an answer to this regulatory hurdle.
Formation of a self-regulator along the lines of the ones at Wall Street could be the best for the industry. It is here that Token Curated Registries (TCR) come into the picture. A TCR can simply be defined as a list of all tokens and ICOs and those wishing to have their name on the top of the list can pay to do so.
Absent a global regulator that can provide a mandate, a TCR may be the best tool to bring teeth to a crypto SRO.
SEC -> FINRA (80 years ago)
CFTC -> NFA (40 years ago)
??? -> Crypto compliance registry (TCR?)
Question is who curates? I think the funds, exchanges, and advisors.
— Ryan Selkis (@twobitidiot) February 16, 2018
This payment fee will mostly be in the cryptocurrency of the native platform. One reason why securities commissions and the governing bodies are open to the idea of a self-regulator for the cryptocurrency industry is because it will save millions of dollars of taxpayers money that would have otherwise cost to keep the regulatory body working smoothly.
Explaining more about what TCR is, Mike Goldin says:
“A token-curated registry uses an intrinsic token to assign curation rights proportional to the relative token weight of entities holding the token. So long as there are parties which would desire to be curated into a given list, a market can exist in which the incentives of rational, self-interested token holders are aligned towards curating a list of high quality.”
Adin, who has also worked on the AdChain project, further added, “Token-curated registries are decentrally-curated lists with intrinsic economic incentives for token holders to curate the list’s contents judiciously.” The AdChain project was the first to use the TCR design.
Messari, founded by Selkis, aims to become a cryptocurrency token that will push the industry to self-regulation. Selkis announced his plans and vision for Messari when he launched it in October 2017. In his blog post he wrote:
“If we don’t do a better job of self-regulating and creating some foundational social contracts in cryptoasset sales and trading, there will be no adults in this industry that deserve a seat at the table when the new laws and regulations are written.”
Selkis believes that the Messari registry will become a system where token issuers pay to feature themselves in the list. Token holders could be made up of top crypto exchanges, advisory funds, venture capitalists and fund managers.