France’s Autorité des marchés financiers (AMF) has issued a request for consultation today, asking for the views of stakeholders on how to handle initial coin offerings (ICOs). The AMF also points out that ICOs present high risks because of the current lack of specific regulations, among other reasons .
The AMF specifies that the operations of ICOs are intended to finance technological projects at an early stage of their development. Subscribing to these operations requires a good understanding of the nature of these projects, the underlying technology and the associated risks. This type of fundraising is by its nature intended for technophiles and the knowledgeable public. As the tokens issued during these operations have different characteristics specific to each operation, it is essential to learn about the nature of the issued token, what it represents for the company that issues it and the risks and benefits associated.
As part of its preparation, the AMF has carried out an initial in-depth study of ICO operations and their legal implications. From this they found that some of the ICOs could be subject to existing legal provisions (regulations applicable to public offerings of financial securities and management of alternative investment funds, in particular).
However, most of the issues would remain, in the current state of the law, outside any regulation that the AMF has at its disposal.
It is in this context that the AMF identified three options for supervising ICOs:
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Promote a guide to good practice on a constant basis;
Extend the scope of existing laws to handle ICOs as offers of securities to the public; and
Propose new legislation adapted to ICOs.
Contributions to the consultation should be sent to the AMF by December 22, 2017,
ICO support program
The AMF also announced today the launch of a program of support and research fundraising of digital assets. Called UNICORN (‘Universal Node to ICO Research & Network’), this program aims to offer ICO projects a framework allowing the development of their operations and to ensure the protection of investors wishing to participate.
As part of this program, the AMF will receive (French or foreign) entrepreneurs and their advisors from different types of projects, which will allow it to deepen its legal expertise. The AMF also intends to encourage academic research on this subject and will publish a first impact analysis of these new forms of financing within one year.