According to a draft report published on August 10th, the European Parliament’s Committee on Economic and Monetary Affairs is currently working on new crowdfunding regulations. The regulations may affect some initial coin offerings (ICOs).
The draft crowdfunding rules do not provide a direct solution for ICO regulation but are a “much-needed step” towards creating such. It is no secret that regulations aimed at ICO investor protection are lacking.
“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 cyber security risks to investors. Therefore, [ICOs] should comply with specific additional requirements under this Regulation.”
The document stresses that ICOs are an “excellent funding stream for tech start-ups,” and suggests that the new framework would help the ICOs that “want to prove their legitimacy to comply with the requirements of this regulation”.
Not every ICO
Not all ICOs would be included. Those considered “private placements” using a counterparty or those looking to raise more than €8 million would be excluded.
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