Last week the French financial regulator, Autorité Des Marchés Financiers (AMF), announced a new initiative called UNICORN, in order to encourage and research all fundraising attempts using blockchain technology. With the increased popularity of ICOs during the last year, most governments have been searching for solutions to address regulatory and tax issues arising from the fundraising technique. In France, the AMF launched the Universal Node to ICO Research and Network (UNICORN) as a means to study the ICO process more deeply. In addition, the AMF has also opened itself up to the public by welcoming public commentary regarding suggestions about the regulation of ICOs.
In order to guide public commentary surrounding cryptocurrency activity, the AMF published a list of questions. These questions stretch over a wide variety of cryptocurrency issues, including white paper standardization, accounting systems for ICOs, reporting requirements for ICOs, licensing issues, and several more. The public has been invited to direct their thoughts to [email protected]. All submissions, however, must be sent before 22 December 2017.
According to the AMF, ICOs are used as a means to fundraising tech-focused projects during the initial phase of the project’s development. The AMF stated that before investors can put their money towards certain ICOs, they require a good understanding of the project in question.
The AMF has identified several risks posed by ICOs, including an absence of regulation, failure to present certain informative documents, the risk of losing investing capital, an extremely volatile market, a greatly enhanced risk of money laundering and scams, and fraudulent projects. In order to address these risks, the AMF has proposed several regulatory policies which could be put in place to minimize the risk posed to investors. Some of these policies include:
- encouraging best practices without implementing new, or modifying old legislature
- modifying current legislature which will identify token offerings as securities
- introducing new legislature concerned with defining and regulating cryptocurrency activity
In addition, the AMF has also identified the three steps that an ICO is generally subject to within its lifespan. The first includes the announcing of the ICO, followed by the publication and publicization of the ICO, and concluding with the actual token sale.
According to the AMF, there is so far no reliable source which calculates exactly how much money has been invested in ICOs. However, it has been estimated that from January 2017 up until September 2017, a total of $1.8 billion has been invested globally. The AMF also noted the particularly international aspect of cryptocurrency activity. In a report, the AMF stated that ICOs should be considered as a multinational, or even stateless, process due to the fact that certain ICOs originate from several countries. So far, four ICOs have been launched in France.