Crypto enthusiasts shriek when the word regulation is brought up. This is because regulations normally have to do with some restriction by some financial regulator likely to make life harder for crypto enthusiasts and investors. This past week, members of the European Parliament met with some blockchain experts in a bid to agree on certain possible regulations for initial coin offerings (ICO). At the meeting, which was dubbed “regulating ICOs- the crowdfunding proposal that we were looking for? Those in attendance had an in-depth look at the current challenges and complications being experienced in the ICO industry.
A British legislator at the European Parliament, Ashley Fox, highlighted three main issues to be examined at the meeting with regard to initial coin offerings (ICOs). These issues were;
- Challenges of raising capital for ICOs
- Existing regulatory approaches on ICO capital
- The industry’s future perspectives
In his part, chairman of the European commission’s task force on Fintech technology, Peter Kerstens, brought attention to the dramatic increase of ICO volumes this year. According to Kerstens, the bulging figures mean that the ICO’s are quite interesting and promising vehicle instruments for raising capital. Kerstens also pointed out that though the ICO industry was subjected to the same challenges that traditional funding activities face, it is vastly different in the amount of money that can be raised. The major usefulness of ICOs in Kersten’s opinion is that it might be hard to raise millions for a startup while raising the same amounts for an ICO is not that difficult.
Kerstens also sought to highlight the main difference between ICOs and crowdfunding, by stating that ICOs were not intermediated, meaning that there was no third party between issuers and investors. Most ICO aspects cannot be solved by crowdfunding proposals because of the numerous differences between the industries as well as the uncertain status of ICOs as financial instruments among other reasons.
At the regulation meeting, Julio Alejandro, Aeternity’s global communications expert gave a very original take on the subject at hand, stating that the only way to stop an ICO project would be to ban crypto exchanges. Alejandro then went on to stress the benefits of the ICO industry which is highly rated and valued by crypto enthusiasts all around the world. According to him, ICOs are so appealing because of their anonymity, ability to transcend borders, mutual transparency, as well as the lack of an intermediary. He further stated that any attempt by a centralized entity to regulate ICOs would render the industry obsolete from its technical perspective. Economic and financial affairs ministers from 28 EU member states are meeting in Vienna on September 7 to discuss main crypto issues such as money laundering, terrorist financing, and tax evasion.
