FINMA publishes ICO guidelines
The Swiss Financial Market Supervisory Authority (FINMA) recently issued a new guideline on the subject of Initial Coin Offerings (ICOs). This provides interested parties with advice on how to qualify ICOs in accordance with Swiss financial market regulation.
The number of new ICO projects has risen sharply in recent months. This is a form of financing for companies, typically start-ups, where investors transfer funds to an ICO organizer. In return, they receive blockchain-based "coins" or "tokens", which are either derived from a blockchain newly developed by the organizer or on an existing blockchain by means of a so-called "smart contract".
The FINMA guideline divides these tokens into three categories: "payment token", "utility token" and "investment token", each category being subject to different regulatory standards. Decisive for the classification is not so much the contractual arrangement, but rather a functional, economic point of view. If the tokens are to be qualified as securities (investment function), the corresponding legal framework has to be applied, in particular the Anti-Money Laundering Act.
Since the differentiation between these token categories can be difficult due to many hybrid models, each case must be assessed individually. However, the guideline contains a questionnaire with the most important information that the organizer has to provide to FINMA together with his request for an assessment.
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