France Starts The Process Of Regulating ICOs

Justine Pope
  • A recent report suggests that French officials are in the process of building regulation for ICO launches.
  • Regulators hope to provide clarity to ICO issuers, to prevent scams and help protect investors.

Reuters reports that France is looking to help protect investors by building regulations on initial coin offerings (ICOs). The report does not outline any proposed or upcoming legislation, but it does give insight into the direction French regulators, and possibly governments worldwide, will take.

With the ICO industry exploding over the past year, most countries are mostly doing one of two things: they’re either banning ICOs (like China or South Korea) or exploring approaches. It appears that France sees regulation as a happy outcome, a path that’ll allow ICOs to continue operating while also removing scams from the industry.

When it comes to crypto, it seems there’s two main legal issues. The first is securities regulation, and the second is tax guidance. France looks to solve both, and hopes that ICO regulation will entice the cryptocurrency market to be more mindful of taxes. Fabrice Heuvard, a member of the French joint government-industry ICO task force, said that, “the community is ready to pay taxes as long as they are not confiscatory.”

It’s estimated that worldwide, $22 billion has been raised via ICOs this year. In France, there’s been only 15 ICOs launched, raising €89 million , and some hope that clear regulation in France would convince more projects to launch in the European nation. The goal of French laws would be to verify who’s responsible for the cryptocurrency’s issuance, determine if the issuers have a contingency plan in case the project fails, and make sure that ICOs are launched in accordance with Know Your Customer (KYC) and Anti-Money Laundering (AML) laws.

Earlier this month the country's prime minister, Bruno Le Maire, tweeted out that new technology can't be regulated using "ancient regulations."

Cryptocurrency advocates seem divided as to what role regulations should play in the markets. Some people embrace them, while some oppose them. Either way, it seems that governments will want to get involved, especially so that they can stop the prevalence of scams. Henry James, deputy CEO of Fincross International, was quoted as saying:

A lot of token issuers are struggling against the stigma associated with cryptocurrencies: they are risky and present opportunities for scammers.

This hints that regulation could bring in more market participants to cryptocurrency, in the form of people who were scared off by scams. Recent United States Securities and Exchange Commission (SEC) actions have highlighted the need for clear government guidance on ICOs. In the past few weeks, it’s been found that the SEC is looking into Erik Voorhees’ involvement with SALT Lending, an ICO for cryptocurrency-backed loans. The SEC has also charged and fined two ICOs for launching unregistered securities, so it seems that after years of “laissez-faire,” regulations are coming.

Top Cryptocurrency Coin Mixer Seized; Grayscale Investments 'Big News' Today; More Records for CME's Bitcoin Futures

Major crypto headlines from the past 24 hours: European authorities enforce a world-first seizure of a leading cryptocurrency coin mixer; New York-headquartered Grayscale Investment set to drop "big news" today; and the all-time highs continue for CME Group's bitcoin futures contracts.

The cryptocurrency market has endured some significant selling over the past day. At the time of writing, bitcoin (BTC) and ether (ETH) are trading at $7,588.2 and $234.5; a 4.3% and 8.6% decline over the past 24 hours, respectively. As for the MVIS CryptoCompare Digital Assets 10 Index, it is currently tracking at 3,594.3 (-2.2%).

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The Dutch Financial Criminal Investigative Service (FIOD) – with the assistance of Europol and Luxembourg authorities – announced the seizure and closure of one of the three largest cryptocurrency mixer services in the world, Bestmixer.io.

This marked the “first law enforcement action of its kind against” a cryptocurrency mixer service, according to a press release from Europol. “A cryptocurrency tumbler or cryptocurrency mixing service is a service offered to mix potentially identifiable or ‘tainted’ cryptocurrency funds with others, so as to obscure the trail back to the fund’s original source,” the statement explained.

Despite the apparent victory for law enforcement, “authorities will come to regret the chain reaction that they are starting here,” according to Cornell associate professor of computer science, Emin Gün Sirer. Explaining his rational, Sirer tweeted “this kind of shutdown creates selective pressure for tumblers that cannot be shutdown. And we know, from the research world, that it’s possible to build much better ones.”

CEO of Cryptoasset Investment Giant Teases ‘Big News’ Today

Grayscale Investments – one of the world’s leading cryptoasset management firms – will be dropping some “big news” at 13:00 (UTC), its founder and chief executive Barry Silbert teased on Twitter.

Grayscale - a Digital Currency Group subsidiary - has been noticeably active on the publicity front in recent times. On May 1, it launched the largest mass media campaign the industry has ever seen and, in the time since, Silbert has been doing the rounds on the media circuit, appearing for interviews on the likes of Bloomberg, FOX Business, and Yahoo Finance.

Records Continue for CME Group’s Bitcoin Futures

CME Group – a world-leading derivatives marketplaces that also offers bitcoin futures contracts – revealed “May is shaping up to be the strongest month ever for CME Bitcoin Futures” in a client email sent on Tuesday.

According to the Chicago-based CME Group, they facilitated the trading of a staggering 33,677 bitcoin futures contracts on May 13; a new daily record. In U.S. dollar terms, this roughly equates to $1.3 billion. The firm also told clients the number of accounts trading its bitcoin futures contracts has risen to over 2,500 – also a new record high.