FINMA recently issued further guidelines with respect to ICOs in Switzerland. In these guidelines, FINMA provides market participants with information on how it will deal with enquiries regarding the supervisory and regulatory framework for ICOs. The guidelines also specify the information required by FINMA to process enquiries from market participants, which is very customer friendly, and also set out the principles on which FINMA will respond to them.
FINMA acknowledges that there is no generally recognised classification of ICOs and the tokens that result from them, either in Switzerland or internationally. FINMA bases its own approach to categorisation on the underlying economic function of the token as follow:
- Payment tokens: Payment tokens (synonymous with cryptocurrencies) are tokens which are intended to be used, now or in the future, as a means of payment for acquiring goods or services or as a means of money or value transfer. Cryptocurrencies give rise to no claims on their issuer.
- Utility tokens: Utility tokens are tokens which are intended to provide access digitally to an application or service by means of a blockchain-based infrastructure.
- Asset tokens: Asset tokens represent assets such as a debt or equity claim on the issuer. Asset tokens promise, for example, a share in future company earnings or future capital flows. In terms of their economic function, therefore, these tokens are analogous to equities, bonds or derivatives. Tokens which enable physical assets to be traded on the blockchain also fall into this category.
FINMA additionally clarifies that the individual token classifications are not mutually exclusive. Asset and utility tokens can also be classified as payment tokens and thus, referred to as hybrid tokens. In these cases, the requirements are cumulative; in other words, the tokens are deemed to be both securities and means of payment. In some ICOs, tokens are already put into circulation at the point of fund-raising. This takes place on a pre-existing blockchain. In other types of ICO, investors are offered only the prospect that they will receive tokens at some point in the future and the tokens or the underlying blockchain remain to be developed. This is referred to as pre-financing. Pre-sale represents another possible permutation. In this case, investorsreceive tokens which entitle them to acquire other different tokens at a later date.
Also, FINMA informs on the cases in which the application of security law, deposit law, Collective Investment Schemes Act, Anti-Money Laundering Act and compliance with AMLA must be observed.
Very helpful indeed is the overview above given by FINMA:
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https://www.finma.ch/en/news/2018/02/20180216-mm-ico-wegleitung/