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FINMA Introduces ICO Regulation in Switzerland

Initial coin offerings are an exciting and worrisome business model at the same time. Regulators all over the world are aware of the risks and in the process of issuing guidelines. Switzerland’s FINMA financial markets regulator did exactly that yesterday afternoon. They outline what ICO projects can expect and need to adhere to in the coming months and years. Some clarification can only be considered to be a good thing for the industry as a whole.

FINMA has kept an eye on the initial coin offering industry. This new way of raising capital is both attractive and problematic at the same time. Especially from a regulatory point of view, there are no safety nets whatsoever. It is up to regulatory bodies to officially intervene sooner rather than later. That is exactly what the Swiss independent market regulator has done earlier this week.

FINMA Wants ICOs to Thrive

In their press release, FINMA shows there is no bias toward this industry. That is unlike what most people had expected, even though it’s always best to find a middle road of sorts. None of the guidelines are overly loose or invasive, and proper evaluations are in order. However, every project is different from the next, and there can be no unified guidelines other than some basic requirements. It also depends on what the token’s functionality is or will be in the long run. Especially “hybrid” tokens are a big concern, but they will be reviewed accordingly.

FINMA CEO Mark Branson issued the following statement:

“The application of blockchain technology has innovative potential within and far beyond the financial markets. However, blockchain-based projects conducted analogously to regulated activities cannot simply circumvent the tried and tested regulatory framework. Our balanced approach to handling ICO projects and enquiries allows legitimate innovators to navigate the regulatory landscape and so launch their projects in a way consistent with our laws protecting investors and the integrity of the financial system.”

For the time being, it remains to be seen how this affects the Swiss ICO industry as a whole. Focusing on AML and securities regulations is a smart decision by the independent regulator. Additionally, they see merit in blockchain technology and want to see which use cases will come to fruition. With cooperation from the government, the ecosystem will thrive in Switzerland in the years to come. It is a positive development overall, although further amendments can always be made when needed.

Header image courtesy of Shutterstock

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