EU Lawmaker Discusses ICO Regulation Benefits

EU lawmaker Ashley Fox discusses ICO regulation benefits. He believes that the rules are aiming to “bring transparency to ICOs, allowing intermediaries to perform the required due diligence.”

10 September, AtoZ Markets One of the European lawmakers believes that new regulations for initial coin offerings (ICOs) will appear as the key to making the sector more accessible within the European bloc. 

EU ICO Rules

A Member of the European Parliament (MEP), Ashley Fox, has reportedly held a meeting with other officials this Tuesday. The meeting has been focused on the discussions regarding the proposed regulations that would establish new rules for ICOs in the EU. To be more specific, these regulations would concern people and businesses that conduct these ICOs. 

Mr. Fox has stated that the rules would be voluntary for projects that intend to engage in token sales. However, he added that he hopes that entities will want to abide by these rules in case they are adopted. The proposal from the EU MEP would restrict the proceeds for ICOs to 8 million euros. It would also establish the know-your-customer and anti-money laundering rules, and provide token startups with access to the entire EU bloc.

He has further explained the following:

“What I’m aiming to do is bring transparency to ICOs, allowing intermediaries to perform the required due diligence. And the effect of this will be to provide an EU-wide law which gives a passport to the whole market.”

 EU Lawmaker Discusses ICO Regulation Benefits

After some time, according to Mr. Fox, more companies might wish to be regulated under this framework. He added:

“ICOs can carry on, but if they don’t fill the [criteria], they won’t benefit. [Introducing the regulations] will give them a passport to the whole of the EU market, and I also think it increases transparency. Right now you have 28 countries, some have national rules for raising money and some don’t have any rules at all. If you raise money in France, for example, you can only use that money in France.”

There is a special benefit of abiding by Fox’s regulation, according to his comments. He defined it as companies having an access to a wider market. 

According to a policy advisor to Fox and secretary to the Innovation Group, Lavan Thasarathakumar, banks and other major financial institutions in the European Union are looking forward to the rules’ introduction. He said that the group spoke to financial institutions and one of the issues that have been unmasked was that of the due diligence. 

Financial Institutions’ Interest

In case a token project will abide by a stricter KYC/AML rule set, banks might be more willing to provide services to these entities, according to Mr. Thasarathakumar. However, he has added that this is “by no means” a guarantee at present.

In fact, banks have been expressing increased interest in holding cryptocurrencies directly in case the industry would be more regulated. European Banking Authority director of banking markets, innovation and consumers Piers Haben, has spoken during the hearing on Fox’s proposed rules. He has stated the following:

“We’re looking at in particular how financial institutions are engaging in cryptos. Financial institutions tell us they do want to hold cryptos … for two reasons. Not in order to make money, but to get to grips better with the technology … and secondly, they want to hold cryptos so they themselves can invest in ICOs.”

Mr. Haben has stated the agency has been discussing this topic with financial institutions.

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