The Russian Association of Cryptocurrency and Blockchain (RACIB) released a report on Monday alleging that out of all ICO money raised in Russia, half of it went to “unscrupulous” startups or pyramid schemes.
This revelation came as part of an announcement that it will undertake a project for creating a set of standards by which the government can assess whether an ICO is scamming its investors or not.
“For ICO projects in Russia, we will create a standard that will distinguish them from fraudulent schemes and pyramid schemes. The development of the document will be handled by RACIB. The criteria of the standard will be, in particular, the reliability of information about the founders and the team, the business plan of the project and minimum viability of the product,” RACIB said in its report.
According to the organization, in 2017, Russians lost $150 million “due to investments in unscrupulous ICOs.”
The total amount of money invested in ICOs in Russia during that period was around $300 million.
Although Russia’s government usually takes direct action to regulate financial markets, RACIB is breaking tradition by intending its guideline document to be used as a reference for self-regulation.
The hope within RACIB is that the government won’t interfere with a sector that might help fund promising startups in the country.
Currently, Russian startups account for 10 percent of the worldwide ICO market, giving it a large amount of weight on a global scale.
The drive towards self-regulation may have also come as a result of the government’s failed experiment in regulating them in the past.
Earlier this month, the country’s telecommunications ministry attempted such a feat only to be met with a massive amount of blowback from major players in the market.
Guidelines that focus on preventing fraudulent practices that might hurt the economy may be more palatable to startups. Eventually, this could pave the way to some light regulation of the market by the Russian legislature that would be more widely accepted.
This article appeared first on Cryptovest
