ICOs are dead: long live ICO 2.0’s!
- Xavier Foz, partner at the Roca Junyent law office, participated in the Blockchain and ICO 2.0 conference: What’s Up Doc in Regulation?, organised by the 4 Years From Now (4YFN) platform
- Foz has put the concept of ICO 2.0 or the Security Token Offerings (STO) on the table in response to the paradigm shift in the crypto industry
- For many investors, STOs are safer as they meet international regulations and the criteria for different regulators, which, unlike the first generation of ICOs, provides them with greater confidence when funding these projects
Barcelona, February 25, 2019.- The Roca Junyent law office has participated for the second consecutive year in the 4 Years From Now (4YFN), the start up and entrepreneur competition, organised by Mobile World Capital Barcelona Foundation and GSMA. Attorney Xavier Foz, partner at Roca Junyent, addressed the Blockchain and ICO 2.0 conference: What’s Up Doc in Regulation? organised by the Barcelona Bar Association (ICAB).
ICOs have received a lot of attention since 2017. However, Xavier Foz explained that “they reached their peak in the first half of 2018 and since then the volume of this type of offering has declined significantly.” This is due to the fact that many of the first ICO-funded projects have not prospered; regulators are tightening the noose on unregulated offerings, and the demand for minority investors has collapsed.
Thus, if Foz explained last year how the ICO boom was attracting the attention of regulators in the most relevant domestic and international jurisdictions, this edition has brought a new concept to the table: ICO 2.0’s or security token offerings (STO) as an alternative to traditional ICOs. According to the co-author of the Blockchain book: The industrial Internet revolution is facing a paradigm shift marked by regulation.
Broadly speaking, for many investors, STOs are safer as they comply with the rules and criteria issued by different regulators; so unlike ICOs, they provide investors with greater confidence when investing in these types of projects. As Foz explained during his lecture, several European jurisdictions like France or Malta are taking steps in this regard.
Regarding its regulation, the Roca Junyent partner explained that in the European Union securities tokens are subject to MiFID II (a European regulation that aims to improve the market security levels of financial instruments within the Eurozone), the Prospectus Directive and, where applicable, the Alternative Fund Management Directive (AIFMD). In Spain, CNMV has issued several communications in this regard, the criteria of which are in line with those of the European Securities and Markets Authority (ESMA).
The workshop, which was attended by more than a hundred people, concluded by talking about the future of this global phenomenon and self-regulation initiatives and proposals for the evolution of this figure to improve investor protection.
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