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Companies and projects have increasingly relied on the sale of digital assets, or tokens, as a means of fundraising. These tokens generally do not grant the holders an ownership interest in the issuing company or project, but may provide governance rights, access rights or other utility. This has been conducted through public sales known as initial coin offerings (ICOs), proliferation through token generation events (TGEs) or private sales, among other mechanisms. While showing characteristics of traditional methods of fundraising, there are a range of unanswered questions related to the legal classifications of such products. As ICOs and TGEs will usually be distributed online and internationally, there is usually no single legal framework applying to such transaction, and the legal framework of each market in which the tokens may be offered or sold needs to be considered.
Introduction
Attitude of the country towards ICOs/token sales
ICOs are not expressly regulated in Mexico. Notwithstanding the above, a general conception is that ICOs are at risk of being categorised as a securities offering and/or a general deposit collection practice, both of which are restricted activities and require authorisation from financial regulators.
In addition to the above, issuance of stable coins is expressly prohibited.
Legal affairs
Presence of any explicit regulation on ICOs and the issuance of token/coins
There is no explicit regulation. Notwithstanding the above, Mexican authorities have taken a conservative stance and, through multiple press releases, have exposed and reiterated the risks of investing in such schemes.
Presence of any explicit restrictions on ICOs or the issuance, distribution and/or transfer of token/coins
Distribution and transfer of tokens/coins is not restricted (other than with financial entities). Issuance of tokens/coins, on the other hand, are at risk of being categorised as a securities offering and/or a general deposit collection practice.
In addition to the above, issuance of stable coins is expressly prohibited and their holding by VASPs may be interpreted by the Mexican regulators as a “deposit-taking” activity, which require the prior authorisation from the Mexican financial regulators.
Obligations and requirements to issue token/coins
Issuance of tokens is not specifically regulated but could be categorised as a securities offering and/or a general deposit collection practice, both of which are restricted activities and require authorisation from financial regulators.
Classification of token/coins in the jurisdiction
The Central Bank defines virtual assets as a unit of information that does not represent the holding of any underlying asset at par, and that is univocally recognisable, even fractionally, stored electronically, whose issuance control is defined by predetermined protocols to which third parties can subscribe, and that has rules that prevent replicas of the unit of information or its fractions from being available for transmission more than once at the same time.
Notwithstanding the above, tokens/coins could also be categorised as securities if there is an underlying asset related to such digital asset.