FINMA To Line Up Former ICOs Under New ICO Guidelines

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The Financial Market Supervisory Authority (FINMA) of Switzerland will be following its recently launched guidelines to evaluate even the past ICOs to see if they are in compliance with the regulations put forth by the authorities.

FINMA ICO guidelines are on move for all ICOs

The official financial watchdog of Switzerland, Financial Market Supervisory Authority (FINMA) has announced that the ICOs that have already taken place in the country will be evaluated retroactively in order to decide if these ICOs were carried out in compliance with the guidelines released by the authority last month.

The CEO of FINMA, Mark Branson stated:

“We will judge the ICOs that were already done in Switzerland along this template or this grid. That makes our work easier when looking at these ICOs to see if they would have been subject (to the guidelines).”

The document that outlines the ICO guidelines explains the classification of these tokens into three types i.e payment, utility, and asset. According to the definition provided by FINMA, these tokens are:

  • Payment tokens “are synonymous with cryptocurrencies and have no further functions or links to other development projects. Tokens may in some cases only develop the necessary functionality and become accepted as a means of payment over a period of time”.
  • Utility tokens “are tokens which are intended to provide digital access to an application or service”
  • Asset tokens
    “represent assets such as participation in real physical underlying, companies, or earnings streams, or an entitlement to dividends or interest payments. In terms of their economic function, the tokens are analogous to equities, bonds or derivatives”.

Also, read: SEC ICO Probe: Issues Subpoenas to Rule Out Fraudulent ICOs


Swiss working on its goal to become a crypto-nation

As per the Swiss law, the “uncertified securities” can be issued and traded if the identity of the creators and the issue denomination is recorded, which can also be done digitally on a blockchain. Moreover, the document considers the token offered along with the third party security on the primary market a licensed activity if it is done in a professional capacity.

Those ICOs that rely on third parties for fund management falls under the Collective Investment Schemes Act that requires the authorized i.e. licensed parties along with their agents to work in the interests of the customers and follow the document to pursue an investment policy.

Benson explained that the guidelines put forth by the Swiss authorities have been very well received. Given their clarity on regulating ICOs, Switzerland has been a preferable region for companies to launch their ICO projects.

With Switzerland’s tilt towards becoming a crypto favourable nation, the country wouldn’t want to be harsh on regulating the ICOs. However, it is yet to be seen what action FINMA would take against the entities that do not confer to the law as there is no clarity on this part.

What are your views on FINMA ICO evaluation decision? Share your thoughts with us!

Achal Arya

I am an entrepreneur and a writer with a bachelors degree in Computer Science. I manage the blockchain technology and crypto coverages at Coingape. follow me on Twitter at @arya_achal or reach out to me at achal[at]coingape.com.

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