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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 seen as an opportunity to raise money by more and more companies, mainly Startups. With the increasing media resonance of Bitcoin and other crypto currencies, ICOs have also become increasingly popular among investors.
Legal affairs
Presence of any explicit regulation on ICOs and the issuance of token/coins
ICOs themselves are not directly regulated. However, the financial supervision laws, as well as anti-money laundering provisions must be taken into consideration to conduct an ICO.
Presence of any explicit restrictions on ICOs or the issuance, distribution and/or transfer of token/coins
As well as with other FinTechs, there are no explicit restrictions on ICOs. Nevertheless, a multitude of supervisory and regulatory questions arise when setting up an ICO. Since the applicable regulation as well as financial and investor protection rules depend on the specific design of the coins or tokens issued in the context of an ICO, a company should adapt its business model or the functioning of the coins or tokens to the respective relevant laws.
Obligations and requirements to issue token/coins
The ICO itself, meaning the issuance of tokens for money, does not require a license.
Classification of token/coins in the jurisdiction
Costa Rican jurisdiction does not classify token/coins. However, the Costa Rican Central Bank has made the following considerations:
In the last decade, technological innovation has allowed the emergence of digital assets issued by private agents through platforms in which there is no participation of a central authority. When created with the idea that they are used as means of payment, these assets are called private digital currencies, and are usually based on tokens.
Among private digital currencies, the most common class are assets that are based on cryptographic technology. This technology allows, firstly, to verify the ownership of assets and their secure transfer between agents and, secondly, to control the creation of additional monetary units in the system (linked to some consensus mechanism). In other words, cryptography is used to prevent counterfeiting, duplicate use of the same unit or excessive creation of these assets. Because of the technology on which they are based, these assets have been called "cryptocurrencies".
Cryptocurrencies operate in an electronic accounting system that keeps track of transactions between people and available purchasing power. Typically, this accounting system is decentralised (i.e. the recording and validation of accounting movements is done by multiple participants, rather than a single entity), and uses blockchain technology for the recording and authentication of each transaction.
Thus, cryptocurrencies are a type or subcategory of digital currency; in fact, the most comm