Initial coin offerings (ICOs) could be receiving acknowledgment toward a legitimized future, according to a draft report on regulations from the European Parliament.
The European Parliament’s Committee on Economic and Monetary Affairs (ECON) has published a draft report that offers insights to new regulatory frameworks for crowdfunding; interestingly, ICOs received a notable mention.
According to the draft, while the proposed amendments to crowdfunding regulations don’t entirely meet all the requirements to sufficiently regulate ICOs, the report positively writes that “it takes a much-needed step towards imposing standards and protections in place for what is an excellent funding stream for tech start”.
Ashley Fox, an MEP representing the UK who spearheaded the draft, has been somewhat bullish on blockchain since 2016. After a Blockchain Conference and Expo held at the European Parliament, ECON voted against “hasty regulatory steps” due to the lack of understanding what blockchain can do.
Fox was quoted saying, “There is a consensus in the Parliament, that policymakers should be careful not to regulate the technology out of existence.”
His proposals now indicate that a better understanding of the space has been achieved to some degree, and now appropriate inroads towards regulating token sales with a proper legal framework are underway.
The proposal offers a solution to the notoriously fraudulent waters of the ICO markets, and also opens up the chance for ICOs to prove their worth. The paper writes, “At present initial coin offerings are operating in an unregulated space and consumers are at risk from fraudulent activity taking place in this market. This Regulation gives the opportunity to ICOs that want to prove their legitimacy to comply with the requirements of this regulation.”
The new rules proposed state that crowdfunding service providers “should be permitted to raise capital through their platforms using certain cryptocurrencies”. Furthermore, the report details that the newly proposed regulation applies only to public sales which raise less than EUR 8 million.
There is an emphasis on the need for regulation in this space and once this regulation is implemented, it will generate a new level of protection for the crypto-community, which could generate positive world-views of the nascent industry and boost it as a whole.
The draft proposal, however, is not binding nor is it final. Fox acknowledges that there will need to be changes made should the proposal be put into an official motion.
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