Members of the European Parliament met to discuss a proposal that, if approved, would create new regulations on initial coin offerings (ICOs).
In fact, the EU All-Party Innovation Group met to seek the potential benefits and issues with rules for ICOs. This could help form part of a crowdfunding framework. Most importantly, if adopted by the European Parliament, it could create a standard for token sales. It could also allow projects to raise funds and conduct business in of the 28 nations.
Laura Royle of the Financial Conduct Authority (FCA), as quoted b Coindesk, said that “we certainly do see a huge potential benefit in this space for firms to raise capital from a broad array of investors and without the cost of an intermediary, but there are risks associated [such as] the potential for fraud, with a lack of transparency and the volatility.”
There is an Essential Need to Act
Nicolas Brien, the managing director of France Digitale, said that there is a need to act. He stressed that the market needs to be legitimized in every jurisdiction of the Union. Brien noted that the need to act is expedient, saying that nobody banks with crypto-asset investors in the UK.
In addition, Brien made a strong case for legislation on ICO.
He maintained that a Europe-wide ICO law is critical for giving people certainty in ICO. He also posited that it is important that the type of token issuers have on offer be specified. Speaking further, he differentiated between securities and transferrable tokens. Brien also said that the regulators must have a position on every ICO in the market. He concluded by adding that an ICO is a type of crowdfunding.
Other speakers take the floor
Laura Doyle of Financial Conduct Authority pointed that ICOs offer good platforms for companies to raise capital. Doyle enjoined that the Union pay attention to the inherent risks, such as fraud, volatility and lack of transparency. She noted that her agency estimates that about 25% to 81% of ICOs in the crypto space are frauds.
Granted, the EU couldn’t reach a consensus. However, a motion of adjournment was adopted for the meeting to be rescheduled on September 11, 2018 for debate.
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