Swiss Financial Supervisor Publishes Guidelines To Support ICOs

Francisco Memoria
  • Switzerland's financial watchdog recently published guidelines to support ICOs in the country
  • Guidelines define three different ICO categories to help entrepreneurs
  • Regulator will regulate ICOs under anti-money laundering laws and as securities

Switzerland’s financial supervisor, the Financial Market Supervisory Authority (FINMA), recently published guidelines in support of initial coin offerings (ICOs). The regulator’s guidelines reveal it will treat some tokens as securities.

Through a press release, FINMA revealed it has been witnessing a substantial rise in the number of ICOs launching in Switzerland, which led to a spike in inquiries it’s been receiving about applicable regulations. The press release starts by clarifying financial market laws and regulations aren’t applicable to all ICOs. As such, the applicability of regulations to blockchain-based tokens will be determined on a case-by-case basis.

FINMA’s guidelines reveal the organization will focus on the economic purpose of the tokens ICOs will issue, as well as on the “underlying purpose of the tokens and whether they are already tradeable or transferable.”

Taking this into account, FINMA outlined three different ICO categories, based on the purpose of their underlying tokens. These categories include “Payment ICOs,” “Utility ICOs,” and “Asset ICOs.”

Payment ICOs would issue payment tokens, which are only to be used as a payment method. Utility tokens, issued in Utility ICOs, are “tokens which are intended to provide digital access to an application or service.” Asset tokens, issued in Asset ICOs, represent participation in a company or earning stream, or “an entitlement to dividends or interest payments.”

These guidelines are set to help entrepreneurs know when they will have to apply anti-money laundering and securities laws. Payment ICOs will have to comply with anti-money laundering (AML) regulations, while Utility ICOs will quality as securities if their tokens “function solely or partially as an investment in economic terms.” 

FINMA CEO Mark Branson commented the organization’s move, stating:

“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.”

Mark Branson

FINMA will see asset tokens, issued in Asset ICOs, as securities, as these represent participations in companies or earning streams, or an entitlement to dividends or interest payments.

The regulator further recognized hybrids can exist, meaning one ICO can be included in more than one of the above categories. According to the Financial Times, Oliver Bussmann, president of the Crypto Valley association in the canton of Zug, predicted FINMA’s guidelines will increase the number of Switzerland-based ICOs. He said:

“It’s about establishing a sustainable business in Switzerland – and not just about raising capital and moving on. If you remove uncertainty, it attracts more business.”

Oliver Bussmann

Dutch Billionaire Calls Agreement With Facebook 'Impossible' in Bitcoin Ad Lawsuit

  • Dutch billionaire John de Mol has asked for a ruling in his lawsuit against Facebook after negotiations have failed.
  • De Mol's lawsuit centers around fake bitcoin ads using his name and likeness. 

Dutch billionaire and ‘Big Brother’ creator John de Mol has issued an update on his lawsuit against Facebook concerning the publication of fake bitcoin advertisements using his likeness for promotion. De Mol says negotiations with the social media company have deteriorated, and is pushing for Dutch courts to deliver a ruling on the case.

Fake Bitcoin Advertisements

De Mol claims that he has been frustrated by a series of bitcoin-related ads that have falsely used his name and likeness for promotion on the social media platform. Despite efforts to negotiate with Facebook, de Mol says that it has been “impossible” to come to an agreement over the false advertisements. 

The billionaire businessman first filed the lawsuit in June and is now asking the Amsterdam District Court to make a ruling in the case.  De Mol released a statement explaining his situation, 

After three months of negotiating it has become clear to me that it is impossible to come to an agreement with Facebook on the misleading bitcoin advertisements.

He continued, 

While the company seemed to be cooperating, it was merely a smokescreen that concealed its reluctance to put in place the desired measures in a timely and correct manner.

Facebook has yet to comment on the issue, but de Mol is not the first person to complain about fake bitcoin ads on the platform. In August, New Zealand TV host Duncan Garner insisted that he was not behind a series of Facebook ads using his likeness to promote bitcoin and expensive cars. 

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