Thus, ESMA and national regulators in the EU are assessing which ICOs come under existing securities rules on “case-by-case” basis. An ICO issues crypto currencies like Bitcoin or tokens to raise funds for a startup company.
Until now, according to regulators, ICOs have had “difficulty” showing their viability and what extra benefits they bring compared with traditional capital raising. In the US, the Securities and Exchange Commission Chair Jay Clayton said in February 2018 he believed most of the sales of new tokens should be considered securities, but it has not classed which coins are securities, according to Reuters.
EU regulators have limited themselves to issuing warnings to retail investors about crypto assets, but this may not be enough. In September 2018, a report for EU finance ministers said the EU should adopt common rules on cryptocurrencies and scrutinize how digital units are distributed.
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