Swiss Finance Regulator will treat some tokens from Initial Coin Offerings as securities. The announcement came amid in surge of inquiries to regulate ICOs launching in Switzerland.
Regulator’s guidelines explain how ICOs will be regulated in future.
The announcement comes in the wake of ICO spike and the inquiries to regulate crowdfunding in Switzerland.
The post reads;
“The guidelines define the information FINMA (Financial Market Supervisory Authority) requires to deal with such enquiries and the principles upon which it will base its responses. Creating transparency at this time is important given the dynamic market and the high level of demand”.
FINMA further asserts transparency is important to the dynamic market and the high level of demand.
The rules represent a step up for projects subjected to trading laws and detailed disclosure requirements. Also, it provides more protection to investors.
Groups from Switzerland have launched many of the world’s biggest ICOs. The Swiss-based foundation, embattled cryptocurrency project Tezos in July raised $232 million.
However, these regulations are not applicable to all ICOs rather it will determine on a “case-by-case basis.” Precisely, it depends on “the function and transferability of tokens and “anti-money laundering and securities regulations.”
Mark Branson FINMA CEO says;
“Our balanced approach to handling ICO projects and enquiries allows legitimate innovators to navigate the regulatory landscape and so launch their projects in a way consistent with our laws protecting investors and the integrity of the financial system,”
The Financial Market Supervisory Authority (FINMA) chief Mark Branson said,
“The application of blockchain technology has innovative potential within and far beyond the financial markets. However, blockchain-based projects conducted analogously to regulated activities cannot simply circumvent the tried and tested regulatory framework”.
The chief executive of blockchain investment start-up Smart Valor,
“For a lot of start-ups that are not operational yet, a compliant ICO will be difficult to achieve.”
However, the very first regulators were investigating ICOs to analyze whether they were operating in accordance with banking and securities law in September of 2017.
As a response, Alexis Rossel, Co-founder & CEO of cryptocurrency brokers in Switzerland, Bity said in a statement
“FINMA… has set the world standard for the global crypto-currency economy with their new ICO guidelines, providing a solid framework for other regulators to follow. The rules are so clear now. And we’re excited that FINMA has recognized crypto-currencies as part of the new financial system.”
Bity appreciates the effort of FINMA to provide guidelines that made it clear to which cryptocurrencies are best to offer on a platform which can be treated as securities.
“The fact that FINMA has also stated that ‘Cryptocurrencies give rise to no claims on their issuer’ is very important. Because it basically means crypto-currencies as payment tokens have to be on an openly sourced blockchain,” he added. “This also means that companies launching ICOs go for it with clear rules. But they must also know that they will not be able to blur the lines on whether their tokens are deemed as securities or not anymore.”