CrowdfundingHub teamed up with FG Laywers to launch a pan-European research to identify liability risk in respect to various forms of crowdfunding. The research is entitled Crowdfunding Cross Borders. CrowdfundingHub and FG Lawyers have enlisted the assistance of partners in 11 different European countries to aid in the collection of information across Europe.
According to the research team:
“Crowdfunding is here to stay. Its exponential growth (in Europe doubling every year) shows that the market is seriously looking into new financing alternatives. Crowdfunding platforms pop up like daisies and are expanding rapidly. Inherently, the platforms, as well as the investors and the project owners, become confronted with other jurisdictions. Other national laws and regulations, another regulator, but most importantly another (claims) culture.”
But what are the risks? Europe currently lacks a specific European wide crowdfunding regulatory framework – like MiFID and the Prospectus Regulation for investment based crowdfunding – does not make the perfect fit with the innovative initiatives that are being developed. The European Commission published document Building a Capital Markets Union recognizes the challenges – and the benefits. A European regulatory framework for crowdfunding is currently not foreseen for the near future but the partnership believes it is “a matter of time that these regulations will be more harmonized”.
“There are a number of evident developments upcoming in the relatively near future: scaling up of platforms, increase of ticket size and creating a trading venue for this new asset type of ‘crowdfunding investments’. Cross border activity will inherently become more important,” states Anne Hakvoort, a partner at FG Lawyers. “With the absence of a uniform European legal framework, crowdfunding actors in Europe will be confronted with more than one national legal regime. Knowledge sharing is essential for creating awareness of the legal do’s and don’t’s and contributes to the professionalization of the European crowdfunding market.”
