national level. Although the cross-border
activity and globalization of crowdfunding
are still limited, crowdfunding is
expanding all over Europe, and especially
in France, the United Kingdom (UK),
Germany and The Netherlands. As of
today, the UK is the leader in terms
of volume inside the EU. In France,
equity crowdfunding and reward-based
crowdfunding are dominant. Belgium is
first for invoice-trading and Germany is
the leader for real-estate crowdfunding
and donations-based crowdfunding. It
is important to notice that there are still
huge disparities between the European
member states; for instance, if you divide
the volume of the transaction of each
the UK is still the leader, but France and
Germany leave the podium and Estonia
enters in second place.
of Crowdfunding?
projects via crowdfunding must be aware
that potential risks include investors not
getting the returns they expected, a loss of
capital, illicit activities performed by the
platforms, or even misinformation.
In response to those different risks,
the European Commission created the
European Crowdfunding Stakeholder
Forum (ECSF) which has the objective
to "contribute to raising awareness,
modules for project owners, promoting
transparency and exchange of best
practices, and identifying issues that
may need to be addressed in order for
crowdfunding to flourish, while taking
into account the interest of contributors"
(explanation given by the Commission).
At the same time, some member states
are implementing "bespoke regimes"
for crowdfunding, taking into account
different European law obligations,
such as the European Consumer Law,
Know Your Customers obligations, due
diligence requirements, the Directive of
Unfair Commercial Practices (Directive
2005/29/EC) or even the Anti-Money
Laundering Directive (Directive
2015/849). What's more, some platforms
must be authorized under the Directive
on the Markets in Financial Instruments
to obtain a "passport" allowing them to
perform financial services and financial
activities through the European market.
So by developing their bespoke regimes,
European Member States try to secure
any financial transactions occurring
by crowdfunding and protect both
parties. European law, Opinions from
the European Parliament, and Opinions
from the European Commission are the
best way for member states to regulate
crowdfunding activities inside the EU
and to allow platforms to thrive in the
near future.
The next objective for the European
institutions and the member states
should be to harmonize the different
crowdfunding European bespoke
regimes in order to contribute to the
sustainability of crowdfunding and its
internationalization with cross-border
activities.
· European Commission working document on the
(ec.europa.eu/info/system/files/crowdfunding-
report-03052016_en.pdf)
Community" (hbr.org/2016/04/the-unique-value-of-
crowdfunding-is-not-money-its-community)
EU 16 (youtube.com/watch?v=kXS0jY2Uk1k)