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The Chamber of Digital Commerce’s Token Alliance is producing a new group of guidelines built to help the cryptocurrency and initial coin offering (ICO) markets grow responsibly. Released today as a whitepaper, the report is entitled “Understanding Digital Tokens: Market Overviews & Guidelines for Policymakers & Practitioners.”

The paper will specifically pertain to “utility tokens,” which provide users with future access to products or services. In these instances, ICOs will raise money for new blockchain products by offering investors future use of the items being developed (usually at a discounted rate).

Former Securities and Exchange Commission (SEC) commissioner and CEO of Patomak Global Partners Paul Atkins comments, “These principles are an important tool for responsible growth and smart regulation that strikes the right balance between protecting investors while allowing for innovation in this new technological frontier. We think it is important to explain the unique attributes of blockchain-based digital assets, which are not all strictly investment based, and provide guidance to consumers, regulators and the industry.”

The whitepaper is broken up into three distinct sections. The first offers a comprehensive overview of current and future regulations to give investors a stronger understanding of securities laws in the U.S., Canada, the U.K. and Australia.

The second part showcases industry-developed principles for both trading platforms and token sponsors to better promote safe and legal business practices and lower the risks to organizers and traders.

The third and final portion of the report provides a general discussion of the growth and evolution of the digital token space thus far.

Perianne Boring is the founder and president of the Chamber of Digital Commerce. Speaking with Bitcoin Magazine, she said that the lack of clear regulation in the cryptocurrency arena, particularly surrounding ICOs, has led to several unsafe practices.

“The Chamber of Digital Commerce is advocating for regulatory clarity,” she said. “Up until now, there has been an absence of clarity on the regulatory landscape for ICOs and utility tokens. Token generation events, which include initial coin offerings, can offer important opportunities for businesses and individuals to participate in token platforms. These platforms offer services that require the token to use the platform. As we have seen, some ICOs have been fraudulent or otherwise violated the law. In these circumstances, purchasers can lose the funds or the value of the token they purchased.”

On an international scale, cryptocurrency regulatory measures are a hodgepodge of disjointed approaches with varying degrees of governmental acceptance, as officials around the globe have set their own paces for regulating the cryptocurrency industry. Some countries, like Malta and Switzerland, have enacted friendly legislation in an attempt to attract industry movers to their borders, while others, such as the United States, have taken a slower and cautious approach to regulation.

Boring believes regulations could introduce legitimacy and protections into a landscape still obscured in popular opinion by skepticism and doubts that are made murkier still by persistent manipulation and fraud.

“Fraud also impacts the reputation of this growing industry. Our goal is to minimize incidences of fraudulent activity while promoting those innovators and businesses who issue tokens for use on their platforms or otherwise comply with securities laws.”

Boring explains that the report is likely to change over time as the industry changes, that researchers will add chapters and sections to the whitepaper as more countries become involved in ICOs and the crypto space, and that the report is an important first step toward ensuring the cryptocurrency market remains clean and unmarred by financial crime.

“These industry-developed principles are the first set of guidelines for the token industry,” she asserts. “They represent a compendium of laws worldwide to ensure that businesses are fully aware of the spectrum of laws that can apply. It also provides market trends to help assess the scope and breadth of this industry. This is our proactive approach to address some of the biggest issues facing the token ecosystem.”

Based in Washington, D.C., the Chamber of Digital Commerce is the world’s largest trade association representing cryptocurrencies and the blockchain. The Token Alliance is one of the organization’s many initiatives and is composed of approximately 350 participants ranging from technologists and economists, to token experts, lawyers and former regulators.

This article originally appeared on Bitcoin Magazine.

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