Governments have been very strict regarding crypto ICOs especially because there have been many unregistered token sales that turned out to be scams. While many consider this as regulatory hostility towards cryptocurrency, the multiple acts of fraud caused in the industry give the regulators a solid reason to crack down on cryptocurrencies and ICOs.
The ICO market was huge back in 2018, with almost $6 billion raised in the first six months itself. 2019, however, has seen a steep decline in this number with only $346 million raised in the first six months. Crypto experts have been predicting a major downfall of the ICO market in 2019, praising `new` fundraising methods through STOs & IEOs.
To everyone’s surprise, France is now taking a newfound interest in ICOs as France’s financial regulator, the Autorité des Marchés Financiers (AMF), has approved the nation’s first application for an ICO.
Prior to this, France’s financial watchdog had already announced that France would be approving several regulatory compliant ICOs that do not constitute securities offerings. Anne Marechal, the Executive Director of legal affairs for the Autorité des Marches Financiers (AMF) had then said:
“France is a precursor. We will have a legal, tax and regulatory framework. We are in talks with three or four candidates for initial coin offerings (ICOs).”
That day is finally here, as French-ICO, a company that has developed a platform for funding using cryptocurrency, has become the first company that has been white-listed. The support will remain valid until the end of the subscription period, which is scheduled for June 1, 2020.
The AMF website mentions that only those offerings that have received the AMF approval may be marketed directly to the public in France. It further noted that the AMF has only approved the ICO proposal, not the token issuer. The issuers could apply for only one ICO over a period of six months from the date of approval.
According to the PACTE law introduced by France in April of 2019, the above-mentioned laws only apply to the issuance of utility tokens. Security tokens would be subject to a different set of rules.
France isn’t the only nation trying to rejuvenate the ICO market. Earlier this year, Thailand’s Securities and Exchange Commission (SEC) approved the country’s first ICO portal for screening and ensuring project consistency of the proposed ICOs. Any interested issuers would have to receive the approval of an ICO portal before applying to the SEC.
The absence of regulation has often been considered as one of the primary reasons for the massive growth of the crypto industry in recent years; the same can’t be said for the ICO. Proper regulations could clean up the crypto space and even make ICOs a viable investment option. This would create numerous possibilities and boost innovation within the crypto industry as many great ideas die due to lack of financial support.
For now, France has reignited the ICO torch and it is yet to be seen how well this fares.