EU Lawmakers Weigh 'Standard' for ICOs Under Crowdfunding Rules
Party Innovation Group tried to define all advantages and disadvantages of ICOs and also discussed the integration of tokensales into the existing regulatory model for crowdfunding.
On Tuesday, September 4, Members of the EU Parliament held a conference dedicated to the discussion of unified standards for initial coin offerings (ICO) inside of the economic bloc.
On the conference, members of All-Party Innovation Group, which was created at the end of last year, tried to define all advantages and disadvantages of ICOs and also discussed the integration of tokensales into the existing regulatory model for crowdfunding.
Ashley Fox, a Member of the European Parliament (MEP), proposed a suggestion in which the maximum investment for the tokensale is limited. The limitation says that an investor may invest up to €8 million in a project. Moreover, it is proposed to reinforce control over adherence to the requirements of KYC and AML.
Nonetheless, if the Parliament approves the suggestion, companies in all 28 EU countries will receive rights to conduct ICOs and maintain cryptobusiness. As Fox denotes, “we, as lawmakers, are trying to make ICO more real and successful, this is our definite goal.”
Meanwhile, CEO of France Digitale Nicolas Brien also added during the meeting that right now there is a ‘necessity’ for creation of a standard like this. According to Brien, the market requires to be legitimate; the situation in the U.K. could be especially sad since none of the banks would work with cryptocurrency companies.
Brien adds: “I completely welcome the suggestion that is beneficial for entire Europe. I think that it always needs to be clear whether the digital asset is a utility token or a transferable security, or whatever the regulator sees it. I’m sure that we can achieve it; ICO is just another form of crowdfunding. I mean, it is different, but it’s a form of crowdfunding.”
However, some of the members stressed on initiation of more strict regulations for ICO. Particularly, they paid attention to a high number of scams deployed on blockchain, which causes a great concern. Laura Royle of the Financial Conduct Authority (FCA), which is one of the supporters of strict measures, says that ICO can be very beneficial for firms who look for investors without any middlemen, although it poses great risks of scams, has lack of transparency and is characterized by high volatility.
FCA sees that there is a significant percentage of scams in the ICO, however, the exact number is still unknown, they say. According to the agency’s data, some of 25% to 81% ICO may be scams.
Returning to the EU Parliament, no clear consensus was achieved and the future of ICO in EU has not been determined yet. MEP can leave their remarks till September 11; after that, the discussion shall be continued.
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