New EU Crowdfunding Law Allows ICO Legitimacy Proving
The Economic and Monetary committee of the EU Parliament has been developing brand new regulations involving crowdfund which may possibly include Initial Coin Offerings as reports on the 10th of August have stated. A UK MEP, Ashley Fox, suggests including a few ICOs into the remit of the new regulations under development since March of this year.
Although the report states that even though the draft itself may not offer a guaranteed solution to properly regulate Initial Coin Offerings, it provides a heavily required move forward in the effort to provide proper regulations designed to protect and provide security for investors.
Stressing about the fact that ICOs are indeed an exceptional method of gathering funds for startups, the report suggests that the new regulations give ICOs looking to verify and prove their legitimacy and willingness to fully comply with all regulatory conditions. According to the report, it suggests that crowdfunding services should have permission to bring in revenue by utilizing specific digital currencies.
Additionally, Initial Coin Offerings provide creative methods of raising funds although they are known to be the root cause of many fraudulent scams and security threats to investors. In light of this, these offerings should be fully compliant with the added conditions of the new regulation.
Ashley Fox has suggested the regulatory conditions would not include every kind of initial coin offerings. Exceptions will include ICOs that have been deemed as private ones, utilizing a counterparty or those looking to gain over €8M. PwC, one of the four largest companies consulting agencies in the world, as well as the CVA from Switzerland collaborated on a report looking into how the ever-rising ICO industry is currently evolving.
According to the report, the United States is utilizing a centralized framework to classify every token issued by any ICO as securities. Europe takes a different approach in that it classifies tokens under three different categories, including asset tokens, payment, and utility tokens as well. Asia, on the other hand, is incredibly mixed in its stance given that countries are either completely banning, neutral, or fully supportive of Initial Coin Offerings.