China publically issued the world’s first government-issued blockchain and cryptocurrency ratings on May 17, 2018. The development is the first in a series of steps planned by Beijing to regulate the burgeoning digital asset class.
Ethereum at Number One, bitcoin at Number 13
According to a on a website owned by , the Asian superpower analyzed and issued public ratings on 28 cryptocurrencies, based on three factors: underlying technology, protocol creativity, and application.
The results show that the platform is ranked as the number one cryptocurrency, with its technology assessment index garnering a total rating of 129.4.
The ministry placed at rank 13, giving it a low 39.4 rating for its technology, and 13.1 for application. Regardless of the low score, the pioneer cryptocurrency enjoyed the highest “creative” index, and this is due to the fact that bitcoin is responsible for starting it all (blockchain and decentralized movement), and being the first one to do so.
Despite releasing ratings, there is no clarity on the rating criteria and methodology. How the agency come up with the numbers is anyone’s guess. The announcement follows the establishment of national guidelines for blockchain technology, expected to be finalized by the end of 2019 to state-run Economic Information Daily.
Unhyped Altcoins Garner Impressive Ratings
The list featured unhyped coins whose application potential was recognized by the Chinese officials. In second place is decentralized content monetization blockchain platform , receiving a higher technical rating than Ethereum but a low “applicability” rating. However, Steem received the best rated “basic technology” with an 82.7 sub-index, presumably due to its innovative blockchain graphene architecture.
For those who missed it, China's CCID (ministry of Industry and Information Technology) has published their rankings on :
— CryptoManiac ⚡️ (@HappyWithCrypto)
In third place is , with an overall score of 104.8 and a sub-index of 64.4, 20.9, and 19.5 for technology, applicability, and creativity respectively.
In fourth place is , China’s “own” blockchain network that regularly draws parallels to Ethereum. Its parent organization, OnChain, reportedly has close ties with the government. Despite its repute, however, officials did not highly regard the currency and gave it significantly lower ratings than Ethereum. Surprisingly, NEO was the second lowest rated currency for “creativity,” with rated the last.
However, the automated smart contract platform was the best rated for “applicability,” with a 26.6 sub-index against Ethereum’s 23.7. In third place in this regard was , another Chinese blockchain project, with a 22.8 application sub-index.
Salient Takeaways from Rankings
Globally, Chinese blockchain applications apply for the highest number of patents, but the rankings clearly show that Chinese officials do not highly regard native projects, indicating that the country lags behind in the area of .
However, the of this index is intended to help Chinese authorities to fully grasp the status of blockchain technology development, alongside tracking the progress of projects in general.
‘Zen’ investors/traders may want to pay close attention to the ‘innovation’ metric, as as the main driver of cryptocurrency returns, as reported by BTCManager during January 2017.
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United States regulators present at the Consensus 2018 conference have made it clear that they are trying as much as they can to sanitize the crypto space by formulating policies that would protect investors and boost growth in the nascent digital currency ecosystem.
The SEC and ICOs
Highly reputable officials of the U.S. regulatory watchdogs, including Commodity Futures Trading Commission (CFTC) enforcement director , Securities and Exchange Commission (SEC) Enforcement Division Cyber Unit chief Robert Cohen, and Associate Deputy General Sujit Raman, were present on the high table on day two of the Consensus 2018 summit.
They discussed essential enforcement activities as regards the virtual currency ecosystem. cryptocurrency exchange’s chief strategy officer, Kiran Raj, was also present while attorney Steve Bunnell functioned as the moderator.
Though members of the panel noted that all views expressed by them were solely their opinions and not that of their respective agencies, they, however, had a consensus of not wanting to stifle innovation while trying to regulate the distributed ledger technology industry as well as the tokens built upon it.
The officials also stated that their primary goal is to completely eradicate who are only interested in defrauding unsuspecting cryptocurrency investors through their .
While most crypto enthusiasts view the SEC as an agency that’s bent on crushing all things cryptos and in the U.S., the SEC representative at the summit, Robert Cohen as well as CFTC’s James McDonald stated that their agencies have a liberal stance towards ICO organizers who are ready to work with it. In Cohen’s words:
“The SEC has been open about meeting with people from the industry, to come in and meet with the staff, to talk about the ideas you have, the new developments, and have a dialogue about the new technology. The commission encourages ways to raise capital; we don’t regulate the technology – we regulate the financial industry and the markets.”
The Need for Financially Sound Markets
McDonald reiterated that the CFTC is working round the clock to ensure the financial markets are balanced and sound. However, the agency flexibly goes about its business, making sure innovation is not stifled.
Also, Rahman noted that the Department of Justice is concerned about people’s safety, adding that vast sums of money traverse the cryptocurrency space without going through traditional financial institutions, hence the need to investigate that criminals and are not using these funds to aid their money laundering activities. In his words:
“The number one priority for the Department of Justice is to keep people safe. One concern we have for the larger virtual currency space is large sums of money are flowing through the market without touching financial institutions…From a national security perspective or an anti-money laundering perspective, that’s something… we have to investigate As with anything else, it’s a balance, but it’s certainly one of our priorities, to know what’s going on.”
More Clarity Essential
Bittrex’s Raj urged regulators to make their guidelines concerning token generation events (TGE) clear enough for stakeholders to understand. In his words:
“One of the big pieces of feedback I get… is we need more certainty. One of the main things we get is we hear about fraud… we agree we don’t want them in the industry. The problem is how do we take guidance and apply it to what you’re doing when it’s so far away from what the fraud people are doing?”
McDonald answered Raj’s question by saying:
“LabCFTC is providing their expertise to make sure we end up in the best place possible. We’re careful not to be putting ourselves out there in the same way that the policy divisions would be, but the policy divisions are having conversations with market participants.”
Cohen also added that the SEC has since released guidance as regards ICO-generated tokens, adding that issuers of tokens that have been categorized as securities need to make efforts to discuss with the regulators. However, organizers of fraudulent schemes find it challenging to comply with this simple directive.
“It’s clear when people are not making good faith efforts to comply, and that’s when we step in,” he concluded.
The journey of a thousand miles begins with a step. Stakeholders in the cryptosphere are all clamoring for amenable guidelines for the industry, and it is only a matter of time before their dreams become a reality.
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