FINMA publishes guidelines on ICOs

Published: 26 February 2018


The Swiss Financial Market Supervisory Authority (FINMA) has published new guidelines regarding the supervisory and regulatory framework for initial coin offerings (ICOs). The Guidelines supplement earlier FINMA guidance and respond to the submission of various enquiries regarding ICOs and the categorisation of tokens. FINMA clarifies that it will focus on the economic function and purpose and transferability of the token, on a case-by-case basis. Whether anti-money laundering (AML) and securities regulations apply to ICOs will depend on whether the tokens are classified as securities.

In absence of international terminology, FINMA classifies three types of token – payment, asset and utility. It classifies them as follows:

  • payment tokens are not treated as securities for ICOs where the token is intended to function as a means of payment and can already be transferred. FINMA will require compliance with AML requirements nonetheless;
  • utility tokens are not treated as securities if their sole purpose is to confer digital access rights to an application or service and if the token can be used in this way at the point of issue. The contrary will be the case if the token functions solely or partially as an investment in economic terms; and
  • asset tokens are regarded as securities, therefore securities law requirements and civil law requirements under the Swiss Code of Obligations will apply to the trading of such tokens.

FINMA may publish a circular in the future to provide further guidance.

If members have any questions or comments, please contact Oliver Robinson.