United Kingdom (and EU regulation)

FCA new webpage on initial coin offerings

The FCA has published a new webpage on initial coin offerings (ICOs).

On the web page the FCA describes at a high level some of the risks related to ICOs.

The FCA also briefly covers the issue of whether or not ICOs are regulated. On this issue the following points are made:

whether an ICO falls within the FCA’s regulatory boundaries or not can only be decided on a case by case basis;
many ICOs will fall outside the regulated space. However, depending on how they are structured, some ICOs may involve regulated investments and firms involved in an ICO may be conducting regulated activities;
some ICOs feature parallels with initial public offerings, private placement of securities, crowdfunding or even collective investment schemes. Some tokens may also constitute transferable securities and may fall within the prospectus regime;
businesses involved in an ICO should carefully consider if their activities could mean they are arranging, dealing or advising on regulated financial investments. Each promoter needs to consider whether their activities amount to regulated activities under the relevant law. In addition, digital currency exchanges that facilitate the exchange of certain tokens should consider if they need to be authorised by the FCA to be able to deliver their services.