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Government of Anguilla announces regulatory framework for non-security token offerings

The Government of Anguilla has announced its plans to bring the initial offerings of specified categories of cryptocurrency under a regulatory regime, according to Investorideas.com.

The government plans to enact the Anguilla Utility Token Offering Act (or AUTO Act), which most likely is the world’s first registration process for an offering of cryptocurrency. The act aims to provide a regulatory framework for “utility tokens” – those tokens that do not fall under the definition of “security” and have one or more utility features within the issuer’s current or proposed blockchain platform.

"In drafting this Act, we saw that tokens that were in effect "securities" are required to comply with the same international regulatory regime as all other securities offerings,” Ravi A. Bahadursingh, co-author of the act. “However, there remained a large swath of non-security tokens with no clear guidance as to where they would fit in the emerging blockchain economy. Therefore, we focused our efforts on creating a safe and effective regulatory framework for non-security token offerings, which appear to represent a majority of the current capital raising activity within the blockchain community."

The Act would permit specified local entities to apply to be registered to conduct a Utility Token Offering. It aims to put in place a standardized registration and disclosure protocol for blockchain projects that intend to issue utility tokens. This includes a streamlined review and approval process, which would require entities to disclose information that should be material to purchasers of non-investment instruments and a technical and legal review of their "white paper."

"We believe this new AUTO Act will help Anguilla become the leader in establishing best practices for cryptocurrency offerings, to protect the people of Anguilla and the participating public,” Victor Banks, Chief Minister of Anguilla, said. "We believe the AUTO Act would be a significant step in the right direction to provide clearly defined rules and increased safety for the blockchain community."

The Act will be regularly reviewed to ensure its effectiveness and would be open to updates to keep up with the evolving blockchain industry. For this, a Utility Token Offering Advisory Committee would be established comprising of participants from the blockchain space.

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