On the back of a series of statements, ESMA today issued one about ICOs, highlighting their concerns for investors that ICOs can cover fraudulent and illegal activities. ESMA further warned investors they can lose their money, and there are now big impacts for ICO platform providers. Also impacted are those agencies, partners and service providers that are involved in promoting, talking about and handling any ICOs activities.
The biggest impact will be for firms (ICO platform providers) that are central to issuing a token as part of the ICO process. It is a stark reminder of their inherent obligations to do things properly and follow the rules that are already in place.
“ESMA is concerned that firms involved in ICOs may conduct their activities without complying with relevant applicable EU legislation.”
It very much looks like ESMA is getting to grips with the direction of travel and how they intend to legislate Initial Coin Offerings now and in the future. The main concern of ESMA is protecting investors, which is a bit crass given the lack of investor protection leading up to and after 2008.
However like most regulation, most of it is bad and protects the few. Now you may be thinking this announcement will only apply to the EU member states. Yes, this is true, but it also brings most ICO activities into the regulatory tent – from a corporate, legal, investor or ICO provider perspective where one or more participants is a European or based here…