The European nation is planning to come up with laws to regulate the issuance of cryptocurrencies.
ICO Regulations Soon in France
France is among the few big economies across the globe that want to capitalize on the growing cryptocurrency industry. The country is willing to host cryptocurrency firms that would like to launch ICOs if they are eager to comply with the laws.
The development was reported earlier this week by Reuters.
Some countries like China and South Korea have banned ICOs while the US wants digital assets to be classified as securities and comply with federal laws governing them. Many others like India are still clueless about which way to take.
The French government believes that compliance with regulations will bring credibility to the projects and they will gain investor confidence. The authorities are even willing to issue certificates to compliant firms.
Profits Will Be Taxed
The government, however, plans to tax profits earned by the firms and has set up a joint government-industry task force to draft accounting rules for ICOs in France.
Fabrice Heuvrard, an auditor who is part of the task force, said:
The (cryptocurrency) community is ready to pay taxes as long as they are not confiscatory.
France plans to roll out the regulations early next year to lure firms that want to launch their ICOs. The move is part of a broader vision to establish Paris as a cryptocurrency hub.
Such a move would help the country grab a pie of the growing industry and increase tax revenues. It is reported by CoinSchedule that $22 Billion have been raised by projects so far in 2018.
Good for Investors
The new regulations would provide protection for investors. Frauds and scams within the ICO market have become commonplace in the absence of specific laws.
To put this in perspective, Coinmarketcap.com currently lists 2080 cryptocurrencies and tokens. Market watcher Deadcoins.com says that 900 digital currencies are no longer active while classifying 200 as scams.
As per the proposed regulations, authorities plan to verify the team behind the project and check if the issuers have enough cash reserves to return investors’ money in case of project failure.
The regulations would also require firms to comply with KYC (Know Your Customer) norms.
According to Reuters, France has hosted around 15 ICOs so far that have raised around 89 Million Euros. 68 ICOs are said to be in the pipeline including Impak Finance, a Canada based company that intends to raise 400,000 euros via its French offering.
Paul Allard, CEO of Impak Finance, said:
The different regulators have been hyper, hyper-proactive. Our plan is to declare the money raised as revenue and pay taxes on the profits we will make on those revenues. Since we are not close to making any profit, it doesn’t really affect us.
However, the taxation rules have not yet been finalized according to a finance ministry official.
Henry James, deputy CEO of Fincross International observed:
A lot of token issuers are struggling against the stigma associated with cryptocurrencies: they are risky and present opportunities for scammers.
ICO regulations by France will hopefully be a development that other developed and big nations follow. So far, the crypto space has been dominated by smaller countries like Malta, Estonia, and Singapore.
What are your thoughts on the proposed ICO regulations by France? Let us know in the comments below.
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