I presented a paper on the above theme at the conference “Recent Issues on Virtual Currency in the Financial Market” held at the Konkuk University (Seoul, South Korea). The program of the conference is attached below. Many thanks to Prof. Byoung Youn Kim for his invitation.
In the paper presented, I developed my thought which I had expressed in my article written last year (and published earlier this year: See this link for a summary.). I noted the decline in the number of ICOs and attributed it partially to the fragmentation of legal regimes. While the blockchain has technologically enabled borderless fundraising in the form of the ICO, the latter is not legally borderless.
An idea of global unification of regulations should, however, be resisted because the optimal balance between the facilitation of fundraising and the protection of investors should be sought through regulatory competition. Attempts at the international level should instead be directed towards the coordination of different regulatory regimes. In this connection, whether the conduct test should be maintained is doubtful. It is a classic test for the territoriality principle. Yet, few would support it if asked whether regulations should be applied on the sole basis that the place of the relevant conduct is in the territory of the regulating State even if the conduct only targets foreign States. The effects test, on the other hand, has a good foundation as it allows the regulator to protect the interests affected. The coordination effort on the international level should also be directed towards developing a network of assistance in cross-border enforcement of regulations, especially those of the place of effects.
For the enterprises wishing to conduct fundraising, the choice will be either to address the investors of the whole world save specific States to avoid being captured by the regulators of such States or to address the investors of the specific States by consciously complying with the regulations of such States. The latter may be called STO (security token offering).
The powerpoint slides used in the presentation are attached below.