The Financial Market Surveillance Service of Switzerland (FINMA) has published official recommendations designed to help start-ups in the country, which offer such a project financing model as the Initial coin offering (ICO).
As the regulator hopes, the document will explain to entrepreneurs cases when laws on combating money laundering and on securities are applied.
In particular, Finma defines three categories of ICO:
Tokens sold under the Payment ICO can be transferred and act as a payment facility. Their sale should be carried out within the framework of the law on combating money-laundering, but they are not considered as valuable financial papers. Under them, as a rule, are the usual cryptocurrencies.
Tokens sold within the Utility ICO do not qualify for securities unless their sole purpose is to provide digital access rights to an application or service.
Tokens sold under Asset ICO are treated as shares or bonds if, for example, they pay dividends, interest, or give rights to income. Such ICOs are conducted within the strict requirements of the Securities Act.
Also, ICOs can exist in the hybrid form of these three categories. For example, laws against money laundering apply to utility tokens, which can also be widely used as a means of payment.
According to the consulting firm PwC, four out of the ten largest ICO in recent times were based in Switzerland.