EU Lawmaker Wants to Include ICOs in New Crowdfunding Rules

A draft proposal from the European Parliament’s Committee on Economic and Monetary Affairs proposes creating new regulations for people preliminary coin offerings (ICOs), according to a document printed Friday.

Work on crowdfunding regulations has been continuing since This past Year, using a formal proposal in the European Commission (the EU’s executive branch) coming in March together with the support of developing a frame on “crowd and peer-to-peer finance.”

According into Fox’s note accompanying the legislative language for its proposition, the frame offers a chance to regulate nominal sales.

“This Regulation gives the opportunity to ICOs that want to prove their legitimacy to comply with the requirements of this regulation. Whilst this regulation may not provide the solution for regulating the ICO market, it takes a much-needed step towards imposing standards and protections in place for what is an excellent funding stream for tech start-ups,” he composed.

The report claims that crowdfunding service suppliers “should be permitted to raise capital through their platforms using certain cryptocurrencies.” However, whereas ICOs “offer new and innovative ways of funding,” they are also utilized to “generate substantial market, fraud and cybersecurity risks to investors.”

The proposed regulation seems only to apply to people sales that increase less than 8 million euros, saying:-LRB-*********)

These new rules would require platforms to make a cap for crowdfunding attempts and follow specific regulations, according to the document.

Fox highlighted the importance of providing some regulatory rules for the distance, noting that “at present initial coin offerings are operating in an unregulated space and consumers are at risk from fraudulent activity taking place in this market.”

While Fox released a draft proposal a week, he also wrote that he “believes that a number of changes should be introduced to improve the proposal,” adding that “this regulation is an opportunity to provide regulation for initial coin offerings.”

European Parliament building picture via Alexandra Lande / Shutterstock

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Original post first appeared in https://www.coindesk.com/european-parliament-proposes-ico-regulations-for-crowdfunding-efforts/

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