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ICO Guidelines in Switzerland

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3 Types of Tokens

The Swiss Financial Market Supervisory Authority (FINMA) set out ICO guidelines, based on the financial market legislation, given the rapid increase number of ICO in Switzerland,  according to its recent press release.
FINMA noted that there is currently no ICO-specific regulation, nor is there relevant   legal doctrine, though its former guideline(FINMA Guidance 04/2017) said that there are several areas in which ICOs are potentially impacted by financial market regulation.
FINMA’s guideline states that Tokens’ key factors are already tradeable or transferable, adding that they would be categorised into 3 types, with hybrid forms.

    • Payment ICOs: Token would function as a means of payment and can already be transferred. Compliance with anti-money laundering regulations would be needed, however, those Tokens will not be treated as securities.

    • Utility ICOs: Token would not be qualified as securities only if its sole purpose is to confer digital access rights to an application or service and if the utility token can already be used in this way at the point of issue. If a utility token functions solely or partially as an investment in economic terms, such tokens would be treated as securities (i.e. in the same way as asset tokens).

  • Asset ICOs: Securities. There are securities law requirements for trading in such tokens, as well as civil law requirements under the Swiss Code of Obligations (e.g. prospectus requirements).

FINMA CEO Mark Branson was cited as saying that the application of blockchain technology has innovative potential within and far beyond the financial markets. 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.”
FINMA recognises the innovative potentiality of blockchain technology and supports the government’s Blockchain/ICO Working Group, adding that the clarification of the  civil law framework will be necessary for the sustainable success of the blockchain technology in Switzerland.

No Specific Updates on Asian Financial Hubs

Meanwhile, Switzerland and Singapore are known as “ICO-friendly” countries,according to the recent reports by Ernst Young.
Singapore’s Deputy Prime Minister Tharman Shanmugaratnam was recently cited as saying that there is as yet no strong case to ban trading of the digital coins, per the  online media.
Another Asian Financial Center Hong Kong’s Securities and Futures Commission (SFC), CEO Ashley Alder was also quoted as saying that SEC would “police (ICO and Cryptocurrency markets) and enforce, when necessary,” by the recent media reports.