European Parliament Assesses ICO Legal Framework

On Tuesday, members of the EU parliament held a meeting to discuss a proposal for new ICO regulations.
Adrian Zmudzinski
European Parliament Assesses ICO Legal Framework

The proposal has been written by Ashley Fox — a member of the European Parliament — and called for a €8M cap on tokens sales and AML/KYC requirements. What’s remarkable about this initiative is that it would create an EU “standard” for token sales, allowing to conduct them in all the Union.

Fox stated that the proposal is meant to “make ICOs more possible and more successful,” not to impede them. Nicolas Brien — the managing director of France Digitale — said that there is a need for urgent regulation since “the market wants legitimization from every jurisdiction. In the UK it’s particularly bad, none of the banks will bank you if you have crypto.”

Brien also explained that there is a necessity for clarity about the nature of tokens and end the debate about which tokens are securities and which are utilities.

Stricter scrutiny to be expected in the EU

During the meeting, many also highlighted the need for more rigorous inspection of the ICO market due to the number of scams in the ecosystem. Laura Royle — a member of the Financial Conduct Authority (FCA) — admitted seeing a “huge potential benefit in this space” in raising capital with ICOs but also wanted to point out problems like the lack of transparency, volatility, and potential for fraud.

The estimates that from 25% to 81% of ICOs may result in fraud, but exact figures are hard to establish.

No definitive decision

There has been no clear consensus in the EU parliament on how to proceed so far and amendments can be submitted by the members by September 11. Still, this is a distinct move forward in regulating the space and opening the market to less risk-prone investors.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.