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Swiss Financial Regulator considering some ICOs as securities

Feb 20, 2018 Posted /  3003 Views

Swiss Financial Regulator considering some ICOs as securities

In a recent press release, Financial Market Supervisory Authority of Switzerland (FINMA) stated in the published guidelines that some Initial Coin Offerings (ICOs) will be considered as securities.

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Initial coin offerings is a way to raise funds for startups. The concept is based on Blockchain technology where the company issues its digital coins. As per report submitted by research firm Smith+Crown, the total Initial coin offering in the year 2017 was around $3 Billion and Switzerland with 25% share became the global leader in trending fundraising method. The regulations released by Financial body aims to clarify the status of the project.

"Creating transparency at this time is important given the dynamic market and the high level of demand," – FINMA

As per sources, the application of regulatory will differ from coin to coin and economic purpose of the token will define its guidelines. Till now three types of coins have been categorized namely "payment tokens," "utility tokens" and "asset tokens,". Out of these three the asset token will be considered as a security.

In an interview with coindesk, a regulator said-

"FINMA regards asset tokens as securities, which means that there are securities law requirements for trading in such tokens, as well as civil law requirements under the Swiss Code of Obligations,"

The CEO of FINMA, Mark Branson stated in the press release that the Blockchain Technology holds wide potential in Finance and other industries as well. Talking about ICOs the CEO said that the tokens analogous to shares of a company will be considered as securities in regulatory framework

“The application of blockchain technology has innovative potential within and far beyond the financial markets,” – Mark Branson

Before coming up with certain regulations, the Swiss watchdog said in September 2017 that they are investigating on various Initial Coin Offering companies whether the banking laws have been followed properly.

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Tags: asset tokens icos ICO tokens security Financial Market

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