European Union regulators have issued two further warnings on ICOs, directed at both investors and participating businesses. On Monday European Securities and Markets Authority (ESMA) followed multiple jurisdictions in raising concerns that ICOs may not conform to regulatory norms.

“ESMA has observed a rapid growth in ICOs globally and in Europe and is concerned that investors may be unaware of the high risks that they are taking when investing in ICOs,” a summary of the reports states. “Additionally, ESMA is concerned that firms involved in ICOs may conduct their activities without complying with relevant applicable EU legislation.”

A shift to providing legislation-compliant exposure to cryptocurrency is coming to the fore, Gibraltar particularly is leading this already with DLT legislation and yesterday publishing a “white paper” on ICO legislation.

Correspondingly, ESMA takes the opportunity to “remind” firms involved in ICOs of their required adherence two four specific EU directives on anti-money laundering (AML). “It is the duty of the firms themselves to consider the regulatory framework, seeking the necessary permissions and meeting the applicable requirements,” it added.

Regulators in countries including Canada and the UK have voiced similar worries about the need for securities compliance in recent months, while Chinese exchange BTCC’s CEO Bobby Lee has said he considers it unlikely China would reverse its ban on the practice in the near future.