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Brad Garlinghouse, CEO of Ripple, spoke with CNBC regarding the state of ICOs, recent attempts by governments around the world to rein in the phenomenon and his approval of some of these efforts.

"There's plenty examples of these recent ICOs that I don't think are good for the industry because they are not demonstrating or solving a real problem and you are seeing examples of fraud. And so I think it's good that you have regulators intervening and stepping in, in countries around the world," he said on Monday in an interview with the broadcaster.

Both China and South Korea have chosen to ban the sale of tokens in ICOs, which made Bitcoin and Ethereum suffer a slight drop in value, which they quickly recovered from, with Bitcoin surpassing $5000 just today.

Japan, the European Union, and the United States do not want to go as far as banning them, but they desire tight controls against fraud, a move which Garlinghouse has applauded in his interview.

Governments tend to view ICOs with a particular level of distrust, citing how easily these fundraisers can lead not only to fraud but also money laundering. The United States and Singapore have taken notice of this and decided to discuss treating tokens like securities.

One doesn’t have to go far in history to find a money-laundering scandal in the crypto world. Alexander Vinik—one of the ringleaders in the BTC-e exchange scandal—was charged on July 27 with money laundering by the United States government, an event that subsequently led to a custody battle with Russia over who gets to extradite him from Greece.

On the same day, the BTC-e domain was seized by the FBI.

Because of their perceived lack of accountability, ICOs have also received a bad reputation by the United States Securities and Exchanges Commission, with chairman Jay Clayton expressing concerns about “pump-and-dump” schemes. 

ICOs may be going through some growing pains, but it seems that some countries have decided to control the phenomenon rather than put a stop to it entirely. What they do will indirectly affect how the future of startup financing plays out and what parts of the world will be more competitive when it comes to raising funds for innovative initiatives.