European Regulator May Draft ICO Requirements
The European financial regulator will consider the details of the arrangement of initial coin offering (ICO) for possible regulation of this procedure, Reuters reports.
ICO organizers issue tokens or cryptocurrencies similar to bitcoin in order to raise funds for the development of startups, and regulators fear that investors may not be immune from fraud and loss of their assets.
Steven Maijoor, the head of the European Securities and Markets Authority (ESMA), stated that their specialists are studying the procedures for conducting initial coin offering, their compliance with existing regulatory acts, and impact on competition in the field of capital raising. The ESMA, together with the regulators in the EU countries, is trying to assess each specific case of an ICO.
Some ICOs resemble a financial instrument, and they must be regulated in this case, Maijoor stressed at the meeting of the Economic and Monetary Affairs Committee of the European Parliament. The challenge is how to classify ICOs that do not fit into the current regulatory framework. The ESMA will prepare a report on this issue by the end of the year.
Until now, EU regulators confined themselves to warning retail investors about the possible danger of investing in crypto assets, but now it is not enough.
Not all representatives of the European financial sector support this view. According to Andrea Enria, the head of the European banking organization, innovations, including ICO, cannot be cornered into any regulatory framework, as this system does not work as expected.
As previously reported, the European financial regulator will allocate more than €1 million for the crypto sphere monitoring.