Showing posts with label EU. Show all posts
Showing posts with label EU. Show all posts

November 14, 2017

After rollercoaster crypto price weekend, European Union issues two ICO warnings

By C. Edward Kelso - November 14, 2017 (

European Securities and Markets Authority (ESMA) issued two same-day warnings concerning initial coin offerings (ICO) on 13 November after the preceding weekend was witness to dramatic swings in prices and volatility. One release is geared toward investors and the other is aimed at participating firms. 

ESMA Warns ICO Investors

In what might be taken as a response to a rollercoaster weekend for cryptocurrency markets, where bitcoin cash traded places with ethereum, and bitcoin shed billions, ESMA has issued two same-day statements regarding ICOs.

Dated 13 November 2017, ESMA50-157-829 focuses its attention on investors. “If you are considering investing in ICOs or have already done so, be aware of the many risks this may entail,” ESMA begins, “including the total loss of your investment. In particular, be aware that you will have no protection,” they note.

ICOs are indeed largely unregulated in the traditional sense, having gained great traction this year as at least a tail in the price-comet that is bitcoin.

“ESMA has observed a rapid growth,” they write, “and is concerned that investors may not realise the high risks that they are taking.” “ICOs are highly speculative investments,” and “depending on how they are structured, may fall outside of the regulated space, in which case investors do not benefit from the protection,” they reiterate.

The regulatory arm is one of the three European Supervisory Authorities within the European System of Financial Supervisors bureaucracy.

They continue, “ICOs are also vulnerable to fraud or illicit activities, owing to their anonymity and their capacity to raise large amounts of money in a short timeframe.” Risks include the above along with money laundering, losing one’s entire capital, lack of exit options and price volatility, inadequate access to information, and fundamental flaws in early, untested technologies, the body urges.

“Virtually anyone who has access to the Internet can participate in an ICO,” they point out.

ESMA Warns Participating ICO Firms

ESMA50-157-828 is decidedly more stern in its tone. Issued the same day, it urges firms “to meet relevant regulatory requirements.” In a cat-and-mouse, near Orwellian turn of phrase, they argue, “If their activities constitute a regulated activity, firms have to comply with the relevant legislation and any failure to comply with the applicable rules would constitute a breach.”

This might be very difficult for firms to ascertain, especially when the very same body refers to them as “unregulated.” Keen readers might ask, are such offerings regulated or not?

Some clarification might be had in the following: “where the coins or tokens qualify as financial instruments it is likely that the firms involved in ICOs conduct regulated investment activities, such as placing, dealing in or advising on financial instruments or managing or marketing collective investment schemes,” the body details. These too seem rather broad and vague.

The memorandum then sets out some basic guidelines for firms. A prospectus is urged among start-ups in the field, containing “necessary information which is material to an investor for making an informed assessment of the facts and that the information shall be presented in an easily analysable and comprehensible form,” ESMA advises.

It continues in this manner, imploring firms to also be transparent in their organizational dealings and structure along with complying with anti-money laundering regulations. “Firms have an obligation to report any suspicious activity and to co-operate with any investigations by relevant public authorities,” they say.

Images courtesy of: Pixabay, Balint Porneczi, ESMA.

C. Edward Kelso

C. Edward Kelso is a long-time fintech journalist, passionately covering the cryptocurrency space since 2014.

November 12, 2017

40 foreign companies ask to allow Bitcoin production in Russia

By Olga Novikova - November 12, 2017 (

Many companies in China and the European Union asked the Russian authorities to give permission for Bitcoin mining in the country.

In Russia, at the moment, the production of crypto currency has become quite a common occupation, but there are still large energy capacities that will suffice for foreign mining companies.

The Russian Association of Crypto-Currency and Blockchain (RACIB) has received 40 applications from various companies and individuals for the placement of mining equipment in the country for Bitcoin mining. The president of the association, Yuri Pripachkin, said: "In Russia, there are hundreds of companies in our country and enough resources to accommodate other companies."

RACIB is an association formed in August, created to unite the owners of Blockchain and miners, as well as investors of crypto-currencies. On its formation, adviser to the President of the Russian Federation Herman Klimenko.

Pripachkin commented on crypto-currency production in Russia: "In fact, this is a completely new market for companies. But it is necessary to make the platform at the legislative level and work out possible tax options for foreign investors. "
According to the director of the association Arseniy Sheltsin, "The organization created a committee of participants in the mining market with the participation of representatives of Slovakia and China". Pripachkin believes that Russia can become the world capital of the mining markets.