Waiting for the EU... The paradoxical effect of ICO's: a national regulation for a global phenomenon

Within the new domain of the crypto-asset – which can be described as a ‘digital asset that may depend on cryptography and exists on distributed ledger’ – initial coin offerings (ICOs) have attracted the attention of financial authorities and regulators worldwide. Over the last two years, legislative initiatives regarding this phenomenon have proliferated within the European Union member states and are now driving the European Commission to act. This action is based on the common opinion that ICOs should present remarkable peculiarities and potentialities among the alternative forms of financing for small and medium enterprises. In this regard, this paper proposes an innovative and ad hoc regulatory approach for all ICO categories, including ones that issue tokens considered to be securities. This research is based upon the recognition that the traditional legal framework was not designed to face the specific needs and risks posed by these instruments, neither from the perspective of consumer protection nor from the view that serious operators need rules regarding.