A meeting was held among the European Parliament members to deliberate on the proposal tabled on the floor of parliament with regards to initial coin offerings (ICO). The proposal seeks to draft new ICO regulations for ICOs that will be held in the economic block.
Proposed ICO Regulations
Members of the European Parliament, the All-Party Innovation Group, held discussions examining the proposed ICO rules and regulations as well as the potential benefits and downsides that they may come with. The proposed regulations if approved will be part of a larger framework dealing with crowdfunding.
The proposed regulations were drafted and presented by Ashley Fox, who is a member and sits in the European parliament. Included in the drafted proposal on regulations is a cap on proceeds to be realized in any initial coin offering, to 8 million euros, and anti-laundering regulations including a know-your-customer initiative.
Most importantly, should the proposed regulations be adopted and implemented, businesses in all the twenty-eight member states of the European Union will have a set standard when looking towards crowdfunding as a method of raising funds for the companies operating in any of the member nations.
A Standard For ICOs
Fox remarked by saying that as members of the European legislature, they were focused towards making initial coin offerings more successful. She added that their main objective is in striving to make it possible for more businesses and companies to hold ICOs.
Nicolas Brien, who is the managing director of France Digitale, during the meeting, stated that it was critical that the parliament act in the creation of a uniform standard to be followed by ICOs explaining that the Crypto market is seeking to be legitimized by every jurisdiction. He said that the situation was especially bad in the United Kingdom where banks would not provide financial services to anyone owning Crypto tokens.
Brien added that by having the proposed European wide regulations, the Crypto market will not only be legitimized but people investing in crypto tokens will have certainty and peace of mind knowing that the sector is regulated. He went on to explain that there is need to obtain clarity on whether Crypto tokens are utilities or a form of transferable security saying that it was critical that clarity is given as to how the regulating regime views crypto tokens adding that it was possible for this to be done considering that ICOs are just another form of crowdfunding.
Stricter laws on ICOs
The meeting also covered the need for stricter scrutiny of Initial Coin Offerings, many representatives and regulators in the European Parliament highlighting the widespread issue of scams plaguing this funding model.
Laura Royle, who is a member of the FCA (Financial Conduct Authority) said that though the sector comes with a lot of potential benefits, mainly allowing companies to raise funds from a diverse group of investors while bypassing the need for an intermediary, the risks and potential of fraud associated with a volatile and non-transparent model as ICOs could not be ignored.
Members of the European Parliament will be able to put forth amendments to the drafted regulations by the 11th of September.