2018 was a very busy year for crowdfunding. With regard to laws, some countries in the world have begun to regulate them to benefit collective financing. Particularly within Europe, where some were already decreed. Today, you’ll know which ones they are.
Learn about Europe’s new laws on crowdfunding
During the first quarter of 2018, new laws on crowdfunding were proposed in Europe. As you already know, these initiatives are always driven by the European Union. This political community started making draft proposals to present new laws. This time, in terms of crowdfunding.
The first indication of this was found on March 8 through a press release from OutLaw.com. Which highlights that the EU applied rules for European crowdfunding platforms based on loans and investments. These were meant to establish guidelines to resolve conflicts with customers. And they added the duty to disclose certain information with them.
By April 13, members of the European Union began to discuss more about crowdfunding. Let’s take into account that there were still no organic laws regulating this method of financing then. But some countries took measures to apply banking and financial regulations. While others used more specific regulations.
During that time, there were still discrepancies among the EU members and they hadn’t agreed to set unanimous laws. Already on September 5, 2018, more concrete proposals began to emerge. Establishing factors such as the minimum amount of capital needed to create a platform. Or the maximum amount of investment per startup.
Approved European laws on crowdfunding
One of the reasons why the EU began to legislate with crowdfunding was because of the problems they went through. It turns out that during 2018, several member countries of the EU reported that crowdfunding platforms within them had certain difficulties. They noted that there were risks in crowdfunding for those who invested in it.
That’s what led them to create proposals for laws in the first place. During most of 2018, provisional measures were applied to protect contributors and campaign creators. Evidently, the EU was aware of the power of crowdfunding. So they tried the best measure to protect it and ensure its growth.
The European Parliament launched a press release on November 5, 2018. It stated that the Economic and Monetary Affairs Committee (ECON) voted to enact laws on the creation and operation of crowdfunding platforms. The first thing that stood out was that they would expand the scope of the crowdfunding regulation.
The maximum crowdfunding offer threshold was taken to 8,000,000 euros. As expected, the law also seeks to protect investors. They must be warned about investment risks together with an informative document prepared by the creator of a campaign. Platforms are required to allow their customers to make claims and complaints freely.
From now on, European crowdfunding platforms will be accountable to the competent authorities. In this case, to those of the member country of the European Union. These laws are approved with the hope that this method of financing will have greater boom in this continent. Something we can see sooner rather than later.
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