German Financial Regulator Publishes Note on ICOs

German financial regulatory body Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin), or the Federal Financial Supervisory Authority, today published a note explaining initial coin offerings and how the authority body sees them. With this note, Germany joins a consortium of countries which have acknowledged the controversial fundraising instruments and provided some sort of clarification on the subject.

Discover credible partners and premium clients at China’s leading finance event!

BaFin stated that it has been receiving many inquiries about its stand on ICOs and whether tokens and digital coins distributed during ICO events are considered financial instruments.

In the issued 'Letter of Advice', the Bafin clarified the regulatory classification of the tokens in the area of security supervision. This will be applicable to any firm or individual dealing in tokens.

The regulatory authority told parties dealing with ICOs that to fully comply with the regulatory rules, they need to check closely associated regulated instruments in the market, such as financial instrument or securities. In case of any discrepancies, they should approach the relevant department at BaFin.

Other EU members

Recently, the Swiss Financial Market Supervisory Authority (FINMA) published guidelines that set out how the institution intends to apply financial market legislation in handling inquiries from ICO organizers.

Following Switzerland’s lead, the Spanish conservative party announced that it is drafting new legislation which will favor cryptocurrency by giving tax breaks to Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Read this Term firms.

Moreover, the British overseas territory of Gibraltar became the first jurisdiction to fully recognize blockchain firms, and ICOs are thus fully regulated in that market.

Meanwhile, BaFin recently ordered Berlin-based crypto exchange GmbH to halt trading, as the latter advertised that it would sell customer's bitcoins for euros and sell them on a Stock Exchange Stock Exchange A stock exchange, also known as a securities exchange or bourse represents is a facility where stockbrokers and traders can buy and sell securities.This includes shares of stock, bonds, exchange-traded funds (ETFs), or other financial instruments. By extension, stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividendsStock exchanges have developed into a permanent fixture in the fin A stock exchange, also known as a securities exchange or bourse represents is a facility where stockbrokers and traders can buy and sell securities.This includes shares of stock, bonds, exchange-traded funds (ETFs), or other financial instruments. By extension, stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividendsStock exchanges have developed into a permanent fixture in the fin Read this Term. BaFin said that the exchange was not authorized to operate in the country.