EU Lawmaker Says ICOs Can Prove Their Legitimacy Under New Crowdfunding Rules
The European Parliament’s Committee on Economic and Monetary Affairs is taking a shot at new crowdfunding regulations that could reach out to some initial coin offerings (ICOs), as per a draft report published on August 10.
Ashley Fox, a British Member of the European Parliament (MEP), proposes bringing some ICOs within the launch of another draft regulatory system for crowdfunding that has been being developed since March.
The report says that while the draft crowdfunding standards may not give a proper answer for directing the ICO space, they represent “a much-needed step” towards presenting fitting regulatory measures intended for investor’s assurance.
Accentuating that ICOs represent “an excellent funding stream for tech start-ups,” the report recommends that the new system offers an “opportunity” for “ICOs that want to prove their legitimacy to comply with the requirements of this regulation”:
“In order to allow for a competitive Union framework, crowdfunding service providers should be permitted to raise capital through their platforms using certain cryptocurrencies […] ICOs offer new and innovative ways of funding but can also generate substantial market, fraud and cybersecurity risks to investors. Therefore, [ICOs] should comply with specific additional requirements under this Regulation.”
Fox recommends that the requirements would not reach out to all types of ICO. Exclusions incorporate ICOs that are thought to be “private placements,” that use a counterparty, or want to raise more than 8 million euros, the “threshold up to which EU Member States can exempt offers of securities to the public from the obligation to publish a prospectus in accordance with Article 3 Regulation (EU) 2017/1129 of the European Parliament and of the Council.”
An ongoing report published by the “Big Four” counseling firm PwC and the Swiss Crypto Valley Association laid out the advancing manners by which the “booming” ICO space currently being moved toward around the world:
“The U.S. uses a centralized system in which all tokens offered by ICO are traded as securities. In Europe, on the other hand, a differentiated regulation prevails [that] classifies tokens into three sub-types: asset, payment, and utility tokens […] Finally, in Asia, regulation is very heterogeneous, ranging from strict prohibition to active promotion of ICO projects. “