German Regulator Clarifies Obligations For ICO Operators Following Increased Interest

February 22, 2018 4:29 pm Published by Jack Durschlag

After receiving “increased queries” about the legal status of obligations for Initial Coin Offerings (ICOs), Germany’s Federal Financial Supervisory Authority (BaFin) has issued a note to clarify, CoinTelegraph reported.

The note, a followup by BaFin on it’s warning to investors from November 2017, discusses the potential “risks” of ICOs, the report said.

Explaining further, CoinTelegraph said the update comes “against a background of increased enquiries to BaFin regarding the areas of securities and asset management” with potential ICO operators enquiring “whether the underlying tokens, coins or cryptocurrencies behind so-called ICOs are viewed as financial instruments within the area of securities supervision.”

The action comes on the heels of action from their counterparts in Switzerland, where financial regulator FINMA last week, the German action similarly introduced new regulatory guidelines for ICOs in response to a large number of questions on how they should be treated within the current legal framework, the report said.

Under Germany’s jurisdiction, the report said, ICO operators “are required to check exactly whether a regulated instrument, [such as] a financial instrument… or a security, is being dealt with, in order to fulfil potential legal requirements without any gaps.”

– WN.com, Jack Durschlag