More ICO Warnings As EU Issues Two Regulatory Statements

By | 14.11.2017

European Union regulators have issued two further warnings on ICOs, directed at both investors and participating businesses.

Released Monday, the European Securities and Markets Authority (ESMA) followed multiple jurisdictions in raising concerns that ICOs may not conform to regulatory norms.

“ESMA has observed a rapid growth in ICOs globally and in Europe and is concerned that investors may be unaware of the high risks that they are taking when investing in ICOs,” a summary of the reports states.

“Additionally, ESMA is concerned that firms involved in ICOs may conduct their activities without complying with relevant applicable EU legislation.”

The “concerns” come as the ICO industry undergoes major changes. A far cry from the explosive growth seen just months previously, pressure from lawmakers has appeared to engender a slowdown in the number of token sales and amounts raised.

A shift to providing legislation-compliant exposure to cryptocurrency meanwhile is coming to the fore, with global FX market CME Group announcing its Bitcoin futures trading would likely go live by the middle of next month.

Correspondingly, ESMA takes the opportunity to “remind” firms involved in ICOs of their required adherence two four specific EU directives on anti-money laundering (AML).

“It is the duty of the firms themselves to consider the regulatory framework, seeking the necessary permissions and meeting the applicable requirements,” it added.

Regulators in countries including Canada and the UK have voiced similar worries about the need for securities compliance in recent months, while Chinese exchange BTCC’s CEO Bobby Lee has said he considers it unlikely China would reverse its ban on the practice in the near future.

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