According to reports, members from the European Parliament and other blockchain professionals met on Tuesday, September 4, to discuss the need to regulate initial coin offerings (ICO).
Speaking at a recent event organized by the EU and titled “Regulating ICOs — Is the Crowdfunding Proposal what we were looking for?” EU parliament members and other blockchain technology experts carefully examined the complicity making rounds in the ICO industry.
In an attempt to buttress his point, Ashley Fox, a British Member of the European Parliament, raised three main concerns at the event, they included, the problem of raising capital via ICOs, the existing laws and approaches on the matter, and the future perceptions of the industry.
In his argument, Peter Kerstens, a renowned chairman of the European Commission’s Taskforce on Fintech, stated that there has been what he describes as a “dramatic increase” of ICOs’ in 2018, despite the skyrocketing cases of fraudulent ICO projects. According to him, this growing number means ICOs are a promising tool for raising capital.
He further stressed that while the ICO industry faces similar problems with other traditional means of raising funds, it is unique in terms of the money it can generate. Stating his point clearly, Kerstens clarified that while it may be extremely hard for startups to raise millions of Euros, it is quite easy for ICO Projects to raise millions of Euros within a few days.
When quizzed to state the difference between ICOs and crowdfunding, Kerstens stated that the fact that ICO tokens are not “intermediated,” meaning there is no third party to mediate between issuers and investors, raises the need for regulation.
To elaborate his stand, Kerstens stressed that the majority of aspects regarding ICOs cannot be sufficiently covered under crowd funding proposals. This is due to the differences in industries as well as the uncertain status of ICOs as financial instruments.
Offering a different view on the matter, Julio Alejandro, a global communication experts has provided crypto enthusiasts with some food for thoughts. According to him, there is no way to stop an ICO project from creation except by banning crypto exchanges. “you can complain, you can cry, you can believe,” but “the only way that you can actually stop an ICO from creation is stopping an exchange,” adding:
“Whenever you want to stop the diffusion and relocation of information, how are you gonna stop it? Are you gonna ban USBs, the computers? What exactly are you gonna ban? You’re banning knowledge.”
While the debate to regulate ICOs continue, Crypto experts would be looking to September 7 when the economic and financial affairs ministers from the EU’s 28 member states meet to discuss the challenges posed by digital assets and the possibility of tightening regulations.