October 16, 2017

October 13, 2017

Subscribe to Latest Legal News and Analysis

ICOS In Switzerland

The Swiss Financial Market Supervisory Authority (FINMA) issued guidance on initial coin offerings (ICOs) on 29 September. FINMA has observed a marked increase in ICOs conducted in Switzerland. It has therefore published FINMA Guidance 04/2017 on this topic. FINMA has also indicated that it is investigating a number of ICO cases to determine whether Swiss regulatory provisions have been breached.

FINMA observes that the structuring of ICOs from technical, functional and business standpoints varies markedly from offering to offering. ICOs are currently not governed by specific regulations, either globally or in Switzerland. Swiss legislation on financial markets is principle-based; one such principle is technology neutrality. Collecting funds for one’s own account without a platform or issuing house is unregulated from a supervisory perspective in cases where repayment is not obliged, payment instruments have not been issued and no secondary market exists.

However, depending on how an ICO is structured, some parts of the procedure may already be covered by existing Swiss regulations. This concerns the following regulatory provisions in particular:

  • combatting money laundering and terrorist financing;

  • banking law;

  • securities trading; and

  • collective investment scheme legislation.

Given the close resemblance, in some respects, between ICOs/token-generating events and conventional financial-market transactions, one or more aspects of Swiss financial market law may already cover ICO campaigns according to their various models. FINMA is currently looking into a number of different cases.

Copyright 2017 K & L Gates

TRENDING LEGAL ANALYSIS


About this Author

Jonathan Lawrence, KL Gates Law Firm, Restructuring and Insolvency Attorney
Partner

Jonathan Lawrence has been a finance partner in the London office since 2005.

Alongside his general banking and finance work, he concentrates his practice on restructuring & insolvency matters -- Legal 500 UK 2016 Corporate restructuring and insolvency “K&L Gates LLP … maintains a ‘quality team’ that includes ‘impressive’ team head Jonathan Lawrence”.

Mr. Lawrence also plays a leadership role in the firm’s global Islamic Finance practice -- Legal 500 UK 2016 Islamic Finance “K&L Gates LLP is...

207-360-8242