EU Lawmakers discuss ‘Standard’ on ICO regulations and Crowdfunding
Tuesday, 4th September, saw a meeting of the Members of the European Parliament (EU), where the topic of discussion was concerning a new set of regulations on Initial Coin Offerings (ICOs) held within the bloc of European States.
The discussion was around the wider benefits and concerns that would be faced with these rules for the ICOs and the larger framework of crowdfunding, the attendees to the meeting were members the All-Party Innovation Group within the European Parliament.
Ashley Fox, a member of the European Parliament representing South West England and Gibraltar, drew up the proposal, in which he called for a limitation of 8 million euros on the sale of proceeds and highlighted the main concerns of the know your customer, anti-money laundering requirements.
In light of these discussions, Ashley Fox said: “be assured, that as legislators we’re trying to make ICOs more possible and more successful, that certainly is our objective.”
A standard of token sales could be implemented if the proposal’s objectives are adopted by the member states. This will allow companies to raise money and operate their business freely in the bloc of 28 member-states.
The Managing Director of France Digitale, an association comprised of promising French investors and entrepreneurs, Nicolas Brien said,
“Having the certainty, but also having that legitimization, I actually welcome having a European-wide proposal because it gives people the certainty to know. I think we need to be clear whether this is a utility token or a transferable security, or how the regulator regime looks at that, but I think this can be done because an ICO is another form of crowdfunding. It’s different but it is a form of crowdfunding.”
One of the main points of discussion was the need to tighten scrutiny of ICOs, given the rise of scams related to cryptocurrency and the malicious use of the underlying blockchain, this was advocated by many representative and regulators at the meeting.
“We certainly do see a huge potential benefit in this space for firms to raise capital from a broad array of investors and without the cost of an intermediary, but there are risks associated [like] the potential for fraud, with a lack of transparency and volatility” said Laura Royale of the Financial Conduct Authority (FCA). The UK based Financial Conduct Authority has been privy to a “high proportion” of fraud, concluded Laura Royale.
Although the talks did shed light on key areas concerning the regulators, no concrete consensus was reached on how better to deal with the ICOs in the future. However, amendments to the proposal can be submitted by September 11th leading to further deliberation on the issue.
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