Monday, 24 June 2019

Swiss regulator FINMA Issues ICO Regulation Guidelines

Swiss regulator FINMA issues ICO regulation guidelines with a vision that these guidelines will help Blockchain technology to enter Swiss markets. What is included in the FINMA’s ICO rules?
The Swiss Financial Market Supervisory Authority (FINMA) has published a set of rules that aim to serve as financial market legislation to the regulation of Initial Coin Offerings (ICOs).

Swiss regulator FINMA Issues ICO Regulation Guidelines

The CEO of FINMA, Mark Branson, believes that these guidelines will help Blockchain technology to enter Swiss markets. Mr. Branson has noted that Blockchain entities “cannot simply circumvent the tried and tested regulatory framework”. He has stated:

“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.”

According to the official press release from FINMA, the creation of the rules was pushed forward due to the increasing number of ICOs emerging within Switzerland. Another reason for the guidelines to appear is the lack of transparency and clarity in regards to the regulation of ICOs. The regulator has noted that “creating transparency at this time is important given the dynamic market and the high level of demand.”

In addition, FINMA has stated that presently, there is no ICO-oriented regulation in place or “consistent legal doctrine” for managing ICOs in the country.

Global ICO regulations

With the aim to evaluate future ICOs and understand which laws apply, FINMA plans to break ICO tokens into three categories. These will include payment tokens, utility tokens, and asset tokens.

At the moment, the global regulation of ICOs has so far been inconsistent. China has gone all in and banned all ICOs within the country back in 2017. Other countries, such as Singapore and Australia have established ICO rules that are designed to support ICOs.

The majority of ICO regulations come along with a warning for investors’ community. The warnings usually feature the reminder of the possibility of encountering fraud while participating in ICO. The press release from FINMA draws attention to the risks related to ICOs in regards to the market’s price volatility. In addition, the Swiss watchdog mentions the unclear legal status of contracts made with Blockchain technology.


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