One of largest financial supervisory authorities in Europe released a letter about ICOs
BaFin, the Federal Financial Supervisory Authority in Germany and one of the largest financial supervisory authorities in Europe has published an advisory letter about Initial Coin Offerings and the classification of tokens as financial instruments.
For some time now, BaFin has been receiving an increasing number of queries enquiring whether tokens and virtual currencies (referred to as ”tokens“) marketed to investors in initial coin offerings (ICOs) are considered to be financial instruments.
The supervisory authority has now published an advisory letter in which it states its position on the regulatory classification of tokens in the field of securities supervision. This concerns all market participants providing services related to tokens, dealing with tokens or publicly offering tokens.
In order to fully satisfy any legal requirements, these market participants must give careful consideration to whether the tokens constitute a regulated instrument, for instance a financial instrument or a security.
The Full Advisory Letter can be found HERE
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