Crypto Industry Transforms from Wild West to Compliance-Driven Landscape
The crypto industry has undergone significant changes over the past decade, transforming from a space where projects could operate without regulation to one where compliance is mandatory.
From 2016 to 2018, the era of self-regulation dominated the scene. The ICO frenzy raised $6.5 billion in 2017 alone, with Filecoin raising $257 million and EOS raising $4.1 billion through a year-long offering. However, few projects considered compliance, instead relying on weak legal narratives that tokens were utility tokens, not securities.
The SAFT framework proposed by Marco Santori aimed to create a transitional path for ICOs, but its legality was contentious from the start. The offshore foundation structure became popular, with jurisdictions like Zug, Switzerland; Singapore; and the Cayman Islands offering favorable conditions.
Regulators eventually caught up, starting with the SEC's DAO Report in 2017, which declared that tokens could constitute securities. This marked a significant shift towards more stringent regulations.