EU Lawmaker Wants to Include ICOs in New Crowdfunding Rules
According to a draft proposal by the European Parliament's Economic and Monetary Affairs Committee, a document released on Friday suggests that a new regulation on the Public Initial Coin Serving (ICO) be instituted.
Ashley Fox, a member of the UK's leading European Parliament (MEP), has drafted a draft report on proposed regulations for European crowd-funding platform operators and businesses. Work on crowdfunding regulations has been under way since last year, and in March the European Commission (EU Executive) issued a formal proposal to develop a framework for "crowd and peer-to-peer financing" Submitted.
According to Fox's memo with the legislative language for proposals, the framework provides the opportunity to regulate token sales.
"This regulation does not provide a solution to regulate the ICO market, but it requires the steps necessary to impose standards and protections, a place for a good funding flow for technology startups," he wrote.
According to this report, a crowdfunding service provider states, "You must be able to procure capital through a platform using a specific Crypto call." But ICO "provides a new and innovative way of financing," but it can pose a real market, fraud and cyber security risk to investors. "
The proposed rule applies only to public sales that increase to less than 8 million euros.
"… A crowdfunding service provider who wants to provide ICO through the platform must comply with certain additional requirements under this regulation, but ICOs that do not use private placement, fundraising exceeding 8,000,000 [euros] It does not fall within the scope of this requirement. "
These new rules will limit the platform's crowdfunding efforts and require them to comply with certain securities laws, the article said.
Fox said, "Currently, the initial coin offering is operating in an unregulated space and consumers are at risk of fraudulent activity in this market," he stressed.
"I think we should introduce a number of changes to improve the proposal," he said. "This is an opportunity to provide regulation on early coin offerings," he added.
European Parliament building image through Alexandra Lande / Shutterstock
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