10 Apr 2020
Extended term for filing tax declarations on income from individual activity
20 Nov 2017
The European Securities and Markets Authority (ESMA) has expressed its position to the recently increasingly popular method for attracting capital – initial coin offering (ICO). ICO is the initial coin offering on the internet with the aim of attracting money for the creation of a new product or service and the development of the company's activities.
Having observed the rapid growth of ICO worldwide and in Europe, ESMA has issued two statements warning that in certain cases ICO companies must comply with rigorous requirements and also warning investors against the high risks.
ESMA is alerting investors of the high risk of losing all of their invested capital as ICOs are very risky and highly speculative investments. The price of the coin or token is typically extremely volatile and investors may not be able to redeem them for prolonged period. Another key risk stems from the fact that, depending on how they are structured, ICOs may fall outside of the scope of EU laws and regulations, in which case investors cannot benefit from the protection that these laws and regulations provide. ICOs are also vulnerable to the risk of fraud or money laundering.
ESMA notes that firms operating in the ICO field in certain cases must comply with the relevant EU legislation. Any failure to comply with the applicable rules will constitute a breach.
The firms must, among other applicable law, comply with the following legal acts:
1. The Prospectus Directive;
2. The Markets in Financial Instruments Directive (MiFD);
3. The Alternative Investment Fund Managers Directive (AIFMD); and
4. The Fourth Anti-Money Laundering Directive.
The press release on the notice of the ESMA can be found here.
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