Cryptocurrency assets are slated to remain in the market for good, an official of the European Commission said in a press conference
“We also had a good exchange of views on crypto-assets. We see that crypto-assets are here to stay. Despite the recent turbulence, this market continues to grow. In particular initial coin offerings, or ICOs, we see they have the potential to emerge as a viable form of alternative financing. Already last year, ICOs helped raise over 6 billion dollars in funding and this year this figure will be substantially bigger,” Valdis Dombrovskis, vice president of the European Commission, said after a meeting of the Economic and Financial Affairs Council.
Classification is one of the challenges associated with crypto assets. Another is the application of existing EU financial rules or the ratification of new EU laws to govern such virtual assets.
“In this context, we are currently working together with European Supervisory Auhtorities on what we call regulatory mapping of crypto assets to answer exactly these questions. Many Member States today supported the need for such mapping, so we expect to conclude this assessment later this year. This will provide a solid ground to build on and to decide on further steps in this area,” Dombrovskis said.
“I also note that we have already expanded the scope of the EU anti-money laundering and anti-terrorism finance legislation to crypto-asset exchanges and custodian wallet providers,” he added.
This year, the Commission, the executive body which proposes legislation for the European Union, will conclude a regulatory assessment for the oversight of crypto assets.
In February, the official implied the regulators would take more of a case-by-case approach to govern certain token projects although he conceded the Commission would undertake more work to do so.
“This depends very much on the facts and circumstances around specific crypto-tokens. Based on the assessment of risks and opportunities and the suitability of the existing regulatory framework for these instruments, the Commission will determine if regulatory action at EU level is required,” he said at that time.
“[ICOs] have become a way for innovative firms in this field to raise substantial amounts of funding,” he was quoted as saying. “This is an opportunity, but there are also problems that expose investors to substantial risk, such as the lack of transparency regarding the identity of the issuers and underlying business plans,” the official added.
Recently, an EU legislator hinted at new guidelines for the oversight of ICOs which would set an upper cap on token sale proceeds, but would also make eligible projects accessible throughout EU member countries.
“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,” Ashley Fox, a Member of the European Parliament (MEP), had said.
“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,” he added.