EU Lawmaker Wants to Include ICOs in New Crowdfunding Rules

A draft proposal by the EP's Committee on Economic and Monetary Affairs suggests creating new regulations for public initial coin offerings (ICOs).

AccessTimeIconAug 13, 2018 at 9:15 p.m. UTC
Updated Sep 13, 2021 at 8:16 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

A draft proposal by the European Parliament's Committee on Economic and Monetary Affairs suggests creating new regulations for public initial coin offerings (ICOs), according to a document published Friday.

Ashley Fox, a Member of the European Parliament (MEP) representing the United Kingdom, wrote a draft report on proposed regulations for Europe's crowdfunding platform operators and companies. Work on crowdfunding regulations has been ongoing since last year, with a formal proposal from the European Commission (the EU's executive branch) coming in March with the mandate of developing a framework on "crowd and peer-to-peer finance."

According to Fox's note accompanying the legislative language for the proposal, the framework provides an opportunity to regulate token sales.

"This Regulation gives the opportunity to ICOs that want to prove their legitimacy to comply with the requirements of this regulation. Whilst this regulation may not provide the solution for regulating the ICO market, it takes a much-needed step towards imposing standards and protections in place for what is an excellent funding stream for tech start-ups," he wrote.

The report states that crowdfunding service providers "should be permitted to raise capital through their platforms using certain cryptocurrencies." However, while ICOs "offer new and innovative ways of funding," they can also be used to "generate substantial market, fraud and cybersecurity risks to investors."

The proposed regulation appears only to apply to public sales that raise less than 8 million euros, stating:

"...crowdfunding service providers that wish to offer an ICO through their platform, should comply with specific additional requirements under this Regulation. However, private placements, ICOs raising in excess of 8,000,000 [euros] or ICOs that do not use a counterparty do not fall within the scope of those requirements."

These new rules would require platforms to create a cap for crowdfunding efforts and follow certain securities laws, according to the document.

Fox emphasized the importance of providing some regulatory guidelines for the space, noting that "at present initial coin offerings are operating in an unregulated space and consumers are at risk from fraudulent activity taking place in this market."

While Fox published a draft proposal last week, he also wrote that he "believes that a number of changes should be introduced to improve the proposal," adding that "this regulation is an opportunity to provide regulation for initial coin offerings."

European Parliament building image via Alexandra Lande / Shutterstock


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.