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Introduction to the EU’s proposed Online Crowdfunding Regulation

February 3rd, 2019 Posted by Uncategorized 0 thoughts on “Introduction to the EU’s proposed Online Crowdfunding Regulation”

by Sadhbh McGrath

Online crowdfunding is the new kid on the block. A buzzword for some time now, online crowdfunding has just started to come onto the EU legislature’s radar. In March 2018, the EU announced their ‘FinTech Action plan: For a more competitive and innovative European financial sector’. This FinTech Action plan has three broad aims: Enabling innovative business models to reach EU scale, Supporting the uptake of technological innovation in the financial sector and Enhancing security and integrity of the financial sector. One way the European Commission acted on these goals was by proposing a new Regulation on online crowdfunding.

For those of you that are not that familiar with online crowdfunding we will first outline what online crowdfunding is and the different types. Next it will be set out why crowdfunding is useful. Last the various approaches taken by legislatures will be outlined.

What is online crowdfunding?

Crowdfunding can be defined as ‘the collecting of resources (funds, money, tangible goods, time) from the population at large through an Internet platform’. When a website or another online platform is used to set out an idea or project and asks for people or institutions to contribute funds to the venture.

Are there different forms of online crowdfunding?

Yes. There are four forms of online crowdfunding:

‘Donation – a donor contract without existential reward,

Reward – purchase contract for some type of product or service,

Lending – credit contract, credit [is repaid] plus interest, and

Equity – shareholding contract, shares, equity-like instruments or revenue sharing in the project/business, potential up-side at exit’.

Vitins set out that a fifth category, pre-purchase that might be added to the above list. In the pre-purchase model investors receive for example watches the production of which was enabled by the funding. However, it is thought that the pre-purchase category is overly similar to the reward class. As such this fifth category has been amalgamated into the reward category.

Does the proposed EU regulation cover all four types?

Broadly, the four types of crowdfunding may be split into two: one half being investment crowdfunding (lending and equity) and the other being patronage crowdfunding (donation and reward). The proposed EU Regulation on crowdfunding has excluded from its scope patronage crowdfunding as:

‘[t]he inclusion of those business models would be disproportionate as they do not deal with financial products and the information asymmetries that these products create. Moreover, EU consumer protection legislation already applies to reward-based crowdfunding with strict rules to safeguard consumers’.

Is online crowdfunding useful?

Online crowdfunding is a new financial product. Online crowdfunding provides a way to finance start-up companies. Obtaining financing from traditional lenders is often difficult or impossible for start-up companies ‘due to a limited track record. Crowdfunding helps fill this gap by enabling them to grow and access more sophisticated funding sources’ (see Europa). 

An attractive feature of online crowdfunding is that risk is spread over multiple funders. Where a single lender provided financing for a start-up company the risk of failure was borne by one party. However, in the online crowdfunding model, the risk of failure is spread between a greater number of parties. Financing start-up companies is a high-risk enterprise.

Current opinion of the EU’s Regulation and approaches taken by legislatures

As the proposal for the Crowdfunding Regulation was announced recently, there is little to no research on this proposed Regulation. There have nevertheless been many papers that have made suggestions on how the EU should regulate (see Vitale). Overall the literature is in favour of legislation for Crowdfunding (see Vitins).

However it is noted that the UK platforms raised concerns ‘that despite good intentions of the Commission, the divergent rules and mindsets towards crowdfunding and peer 2 peer lending across Europe mean that it will not be possible to achieve a legislative outcome that facilitates rather than holds back the sector and cross- border investment’.

The US took a legislative step in enacting the CROWDFUND Act in 2012. The United States previously did not explicitly take an official stance on crowdfunding. 

Although the United Kingdom is still a Member State at the time of writing, it is unlikely that the Crowdfunding Regulation will be implemented before Brexit. Currently crowdfunding is indirectly governed by the Financial Services Authority under the Financial Services Market Act 2000. The Financial Services Market Act 2000 contains ‘a number of regulations that have been loosely adapted to crowdfunding (at least for the time being, until the United Kingdom passes explicit equity crowdfunding laws)’ (see Weinstein).

Australia has taken similar approach to the UK. The Australian legislature simply stated that Australian Securities Laws applied to crowdfunding. Then, ‘Australia issued “guidance” on crowdfunding’ (see Gabison). However transparency concerns have been raised (see Vitinsand Vitale). Crowdfunding is largely of benefit to start-up companies. Start-up companies are unlikely to have the resources to safely navigate complex laws on requirements and exemptions. It will be instructive to examine the effect of this legislation on start-up company’s utilisation of crowdfunding. However, crowdfunding is not limited in its use for start-up companies. Crowdfunding platforms such as Initiative Ireland provide a means to raise capital for property development. The Regulation does not take this into account.


Investment crowdfunding is a new form of financing that fills ‘the void between patronage crowdfunding and traditional brick-and-mortar financing’ (see Burkett). It is accessible to all regardless of location and dependent only on your internet connection (see Schwartz). The current proposed EU regulation is a step in the right direction. However, the main focus is on the information that is provided to crowdfunders regarding the projects that are being crowdfunded. There are many other issues that the proposed EU Regulation is silent on such as issues relating to enforcement of a security if the situation arose. 

The EU has taken a positive step but has much farther to go.

Artificial Intelligence Writing Competition

September 26th, 2018 Posted by ai, big data, competition, events 0 thoughts on “Artificial Intelligence Writing Competition”

Center for Legal and Court Technology (William & Mary Law School)

CLCT is pleased to announce its second annual writing competition dedicated to innovative legal issues likely to arise from Artificial Intelligence, the Internet of Things, and/or related technologies. A submission is not required to contain a proposed solution to the issue; however, any plausible and well-articulated solutions put forward are likely to impress the judges! Judges will select the best entries which creatively and innovatively address these criteria.

Submissions will be accepted now through December 18, 2018.

More details can be found here.

Graduate Law and Artificial Intelligence Conference

September 26th, 2018 Posted by Uncategorized 0 thoughts on “Graduate Law and Artificial Intelligence Conference”

Cyberjustice Laboratory, Université de Montréal, February 25, 2019

In preparation of the International Conference on Artificial Intelligence and Law (ICAIL), the Cyberjustice Laboratory of the Université de Montréal will be hosting a number of scientific events dedicated to artificial intelligence. One such event, the Graduate Law and Artificial Intelligence Conference (GLAIC), will be held on February 25, 2019, in Montreal, Canada.

The conference is open to current doctoral students, recent graduates, early-career academics and professionals who specialise in law and technology. The conference is intended to provide participants with a stimulating environment to discuss their work and to facilitate future research and professional collaborations between young scholars and practitioners under the auspices of the Cyberjustice Laboratory and beyond.

Call for papers here.

Justice of the Future: Predictive Justice and Artificial Intelligence (CEPEJ)

September 17th, 2018 Posted by ai, big data, comparative law, governance 0 thoughts on “Justice of the Future: Predictive Justice and Artificial Intelligence (CEPEJ)”

The European Commission for the Efficiency of Justice (CEPEJ) has just published its 16th Newsletter dedicated to the theme of: “Predictive justice and artificial intelligence (AI)”. Artificial intelligence in the field of justice is central to debates in all Council of Europe member States. The newsletter provides an overview of some of AI’s applications in the justice field and describes some of the challenges and issues facing public policymakers. The newsletter also describes the work in progress within the CEPEJ, both in the fields of judicial timeframes, quality of justice, mediation, evaluation of judicial systems and cooperation.

More details here.

Towards an Algocracy? Interdisciplinary Approaches to Algorithm Governance

September 17th, 2018 Posted by ai, big data, comparative law, conferences, events, governance, private law 0 thoughts on “Towards an Algocracy? Interdisciplinary Approaches to Algorithm Governance”


AI and self-learning algorithms have become important tools in our everyday lives. We use AI and related technologies to make determinations and predictions in order to optimize our decisions. Decisions may even be based solely on automated processing, for example when an online credit application is automatically refused or recruiting practices are fully automated. From a legal point of view, the effects of such automated processing may be discriminating and in violation of privacy rights, especially if the automated decision concerns highly sensitive domains such as criminal justice, law enforcement, housing, hiring, and education.

We as a society have to ask ourselves whether we want to live in a decision-making environment where individual autonomy is lost in an opaque set of algorithms.  An algorithmic governance system may help to ensure the legitimacy and effectiveness of algorithms. In designing such a system, the legislator has to find a balance between effective privacy protection, the protection of company and business secrets and digital added-value potential. In our conference, we wish to deepen the public debate on this topic and answer questions such as: To which extent do we want algorithms to guide and shape our behavior? How can we design effective governance systems for algorithms? How can transparency and explainability of algorithms be secured?

We will address the potential risks of the algorithm revolution and discuss several interdisciplinary governance approaches. To this end, we have invited international experts to present different approaches to this fundamental and pressing issue of our time and are looking forward to an insightful and productive interdisciplinary debate. 


Conference TILTing Perspectives 2019: ‘Regulating a world in transition’

September 17th, 2018 Posted by ai, big data, blockchain, comparative law, conferences, events, governance, platform regulation, sharing economy 0 thoughts on “Conference TILTing Perspectives 2019: ‘Regulating a world in transition’”


Technology is transforming society on many fronts. In recent years, we have seen the sustained move from atoms to bits, rise of social media and the sharing economy, and the rapid development of cloud computing, big data, smart devices, and robotics. Along with these developments we see a continuous stream of new legal and regulatory issues. For every problem solved, two new problems seem to surface.

TILTing perspectives 2019 brings together for the 6th time researchers, practitioners, policy makers, and civil society at the intersection of law and regulation, technology, and society to share insights, exchange ideas and formulate, discuss and suggest answers to contemporary challenges related to technological innovation. The conference will include plenary sessions, parallel sessions, and panel discussions with invited speakers, as well as presentations from respondents to a call for papers.

International Conference ‘Blockchain, Public Trust, Law and Governance’

September 17th, 2018 Posted by blockchain, conferences, events, governance 0 thoughts on “International Conference ‘Blockchain, Public Trust, Law and Governance’”

UNIVERSITY OF GRONINGEN, 29-30 November 2018

The Economist named blockchain the ultimate ‘trust machine’ that is deemed to replace traditional banking systems, land registers, public record systems, and even traditional election voting systems. Blockchain offers the opportunity to address the trust, transparency, and bureaucracy challenges that several public bodies currently face. Furthermore, the blockchain offers new collaboration opportunities between governments and citizens. It verifies close to real-time transactions, simplifies regulatory compliance, promises efficiency gains through the reduction of intermediaries, and reduces the risks of fraud and cybercrime.

Throughout the world, governments are experimenting with blockchain in different areas. However, it remains a black box to many citizens, public bodies, and companies. This in itself raises concerns for areas where democratic processes are essential to create legitimacy. Additionally, many question whether the technology is stable and secure over the long run, if total transparency is desirable for all kinds of public services, whether it is scalable enough or consumes too much energy, what its social impact is, whether existing legal frameworks are challenged by this system, and how the technology and its users can be “fixed” if mistakes occur. Hence, the ‘trust machine’ has not been able to conquer the minds and hearts of many skeptical public and private actors.

The conference ‘Blockchain, Public Trust, Law and Governance’ will bring together reputed academics, talented professionals, and a selection of innovative entrepreneurs working on blockchain to discuss the applications of this technology to government as well as its regulatory, ethical and policy challenges.

This conference is hosted by the department of Constitutional Law, Administrative Law and Public Administration of the Faculty of Law of the University of Groningen that specializes on the study of how public law can contribute to public trust in government.

Register here.

Younger Scholars Forum in Comparative Law

August 8th, 2017 Posted by comparative law, conferences, events 0 thoughts on “Younger Scholars Forum in Comparative Law”

XXth International Congress 2018 International Academy of Comparative Law Fukuoka, Japan July 25, 2018

Call for Papers

We invite younger scholars to participate in the first-ever Younger Scholars Forum in Comparative Law, to be held in Fukuoka, Japan on Wednesday, July 25, 2018, from 9:00am to 12:00pm as part of the larger quadrennial Congress of Comparative Law organized by the International Academy of Comparative Law (IACL). Abstracts are invited for eight (8) Workshops and one (1) TED-style Speakers’ Corner. All nine sessions will be held concurrently from 9:00am to 12:00pm on the day of the Forum. More details follow below on the subject-matter of each Workshop and on the format of the Speakers’ Corner. Workshop 5: Technology and Innovation: Challenges for Traditional Legal Boundaries Abstract: Technology has challenged longstanding legal paradigms, changing the way lawyers regulate tourist accommodation (e.g. with Airbnb), labor (e.g. Uber), public decision-making (e.g. use of big data by tax authorities), liability (e.g. robots’ actions), intellectual property (e.g. platforms like Spotify or Pandora), and even war (e.g. use of killing drones). How should law respond to these technology-mediated challenges? Technological evolutions also challenge the paradigm of territoriality of law and have led towards the emergence of a new paradigm, that of transnational law. In data protection, for instance, European authorities have attempted to enforce EU law outside EU, leading to serious conflict of laws with countries like the US that do not maintain similar standards. Can the clash of values reflected by such clash of standards by transcended? What would be the appropriate solutions? We invite paper submissions on law and technology, including (i) comparative intellectual property law; (ii) artificial intelligence; (iii) regulation of the platform economy; (iv) data science and law; (v) privacy and cybersecurity; (vi) technology and human rights.

Distinguished Provocateur-Discussant: Sofia Ranchordás (Netherlands)

Moderators: Catalina Goanta (Maastricht); András Koltay (Hungary)

Find the full call for papers and all workshops here.

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