ICO Tokens To Be Regulated In Switzerland By Swiss FINMA

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Switzerland’s ICO sector is growing massively and won’t be left unattended to. The Switzerland Financial Market Supervisory Authority (FINMA) has announced that it is going to be introducing regulations for it’s Initial Coin Offering (ICO) industry which is growing extensively. FINMA stated that an increase in sales of tokens in the country during ICOs had led to “corresponding increase in the number of enquiries about the applicability of regulation”. The regulation will take the form of recognising as securities some of the tokens that are issued during ICOs.

All ICOs Will Not Have The Same Regulations

The regulations, according to the financial market regulator will be applicable to tokens on individual basis and not a one for all system, in this it would also take into consideration the reason for which that token is being issued out. During a press statement where it announced it plans for a regulation the firm stated that “Depending on the manner in which ICOs are designed, they may not in all cases be subject to regulatory requirements,”.

Categorisation Of Tokens

FINMA more than just announced its plans to regulate tokens, it also gave a breakdown of the format the regulation of the ICOs would take. First you have the asset tokens which will be treated as similar to bonds and equities. Then there are what it calls payment tokens which will also be treated as akin to regular cryptocurrencies which do not really have external links to other “developmental projects”. Then you have the last category it calls utility tokens; tokens that are made for the purpose of aiding digital access to apps or services. However it also stated that some utility tokens could be regarded as securities should they in economic terms be seems as investments but payment tokens will in no wise be regarded as securities.

The Possibility Of Hybrid Tokens

The firm believes that there could be scenarios where a certain token had functions or similarities of all three categories it had stated. In that case the regulations, said the firm, applicable to the categories that token has features of will be applicable to that token.

The form’s head showed his approval for blockchain technology and the potential it had in changing how we see businesses and the financial market at large, however he still highlighted that there was a need for projects based on it to be regulated with “tried and tested” structures.

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