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Switzerland puts a hand over supervising ICOs

Feb 26, 2018

February 16th became an important day for European crypto-community. Switzerland showed itself as a progressive jurisdiction and published guidelines regarding the ICO regulation. It was developed by The Swiss Financial Market Supervisory Authority (FINMA).

Many Swiss startups has now decided to announce ICO as acceptable since it is easier than attracting investors as it was 5 - 10 years ago. From now on, FINMA will analyze every case and apply appropriate and corresponding financial legislation for each case.

A very important part of this announcement is that Europe began embracing cryptocurrencies and other new technologies. In the nearest future, we hope these regulations will become more detailed and profound, but for now, even this is a serious step for the conservative countries like Switzerland.

Current edition of the guidelines is mostly aimed at anti-money laundering politics. An every crypto-business looks very risky for the traditional economies and they want to protect what they have. Therefore, an approach to ICO regulation is still caused by need to protect oneself from money laundering and financing of terrorism.

Many questions aroused while deciding on token regulations. For example, currently there are different types of tokens and approach to them is measured by their purpose. They are distinguished into the three types: payment, asset and utility. Payment tokens are the simplest and, even though they are under FINMA control too, they are mostly connected to a single project. Also, they can be used for payments only which limits fraud capability. Asset tokens can be used after ICO as analogues of equities, bonds or derivatives. This means they are more complicated and create more stable connection between the startup and an investor. Finally, the utility tokens ensure providing a service or an access to the product for its purchaser.

Considering this, FINMA, classifies both, utility and access tokens, as securities. This implies that the requirements for them are stricter than for payment tokens. However, the authority still controls all three types.

The European financial regulators community still does not have a unified position about cryptocurrencies, blockchain and ICO. For the time being, Switzerland is a pioneer in this case and these regulations might become a runway for the EU and the UK. Potential of crypto technologies is incredible and Offshorelicense Ltd is a reliable escort for business wanting to enter crypto-world. European countries are just starting to adopt the new technologies and it is important to monitor the latest news.

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