European Regulators to Add New Initial Coin Offering (ICO) Guidelines for Crowdfunding
An EU MP Wants To Include ICOs In Crowdfunding Rules
A draft plan muted by the Committee on Economic and Monetary Affairs of the European Parliament is routing for the creation of new regulations which are meant for initial coin offerings. A draft proposal was written by Ashley Fox, an MP representing the UK, recommended the introduction of new regulations for Europe’s crowdfunding platform firms as well as operators.
At the moment, there have been efforts to come up with crowdfunding regulations which has been in the pipeline since 2017. There is an official proposal from the European Commission which is expected by March next year. The official proposal will have the mandate of the EC to come up with a framework on ‘crowd as well as peer-to-peer funds’.
Standardize The Sale Of Tokens
According to a note which was released by Fox to go together with the legislative language for the proposal, the structure offers prospects to standardize the sale of tokens. Fox asserted that the supervision offers prospects to ICOs that desire to substantiate their legality to act in accordance with the necessities of the directive.
In as much as the directive may not offer the solution for regulating the ICO marketplace, it is a good step forward even as it seeks to impose standards as well as protections for an exceptional way of financing tech start-ups.
According to the report, firms that offer crowdfunding services ought to be allowed to raise funds via their platforms by making use of other virtual assets. It is also worth noting that in as much as Initial Coin Offerings provide creative ways of raising funds, unscrupulous people may take advantage of the system to create substantial market, defraud and be a cyber-security risk to would be investors.
In many ways, the suggested directives seem to be applicable only to public sales that raise anything below eight million Euros. This is because the directive states that Initial Coin Offerings that intend to raise over 8 million Euros do not fall within the scope of the requirements which have been indicated.
Fox has been in the forefront of laying emphasis on the significance of placing regulatory course of actions for the crypto space. This is vital as a way of ensuring that consumers are not placed at risk of losing their investments.