EU Mulls Regulations For The Initial Coin Offerings Space

Over the last two years, there have been reports of Initial Coin Offering exit scams that have gone dark with total investments in the region of $96.8 million. According to Diar, a blockchain intelligence firm, the Initial Coin Offerings space has become very lucrative as wealthy investors rush to snap up deals. However, scammers have discovered the possibility of cheating out fortunes in the space, a phenomenon which the European Union seeks to remedy.

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Stemming the drizzle before it becomes a downpour

As reported by Coindesk, a Member of the European Parliament “wrote a draft report on proposed regulations for Europe’s crowdfunding platform…” This framework provides an opportunity for the relevant authorities in Europe to regulate token sales. The report goes on to state that the opportunity afforded by the regulation allows the ICOs to prove their legitimacy through compliance with the requirements of the regulations.

Per the report, this regulation does not provide definite solutions to the scams that have become endemic. However, it is a first step in the direction of standard-setting and protection of clean businesses that rely on the platform for much-needed funds.


The crypto market is fairly young and is fledgling in many jurisdictions. There are reports of some countries imposing laws that are targeting the complete ban on the usage of digital tokens as legal tender. In this view, some developers have expressed their lack of faith in any regulation that may be targeting the crypto market in any way.

However, Mr. Ashley Fox, the MEP representing the United Kingdom and who came up with the report, reiterates the benign intent of the regulation. He says in the report that the new rules will “require platforms to create a cap for crowdfunding efforts and follow certain securities laws.”

Fox emphasized that defining the rules of the game in the ICO space will be beneficial to all. According to the report, the principle intent of the regulation is the need to protect the legitimate business entities that are operating on the platform and also to ensure that investments are protected.

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