Country _ Name
ICO / token sale
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.


Attitude of the country towards ICOs/token sales

ICOs are seen as an opportunity to raise money by more and more companies, mainly Start Ups. With the increasing media resonance of Bitcoin (BTC) and other cryptocurrencies such as Ether (ETH) or Ripple (XRP), Initial Coin Offerings 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. But the banking supervision laws as well as anti-money laundering provisions must be taken into consideration to conduct an ICO. The relevant legal provisions depend on how the ICO is structured and which legal nature the token has. For example, the token can be deemed a financial instrument, a security, a capital investment or neither of those things with the result that different regulatory provisions must be heeded.

A license is only required when a banking, financial or payment service is provided when carrying out the ICO. The ICO itself, meaning the issuance of tokens for money, is not dependent on a license.

License costs for a banking or a financial service depend on the specific business model and result from fixed and time spent costs. Fixed costs are typically in the range of EUR 4,700.00 and additional time spent costs depend on the complexity of respective business model. The costs of a license for a payment service range up to EUR 13,523.00 depending on which and how many kinds of payment services the license is supposed to cover plus time spent costs.

Presence of any explicit restrictions on ICOs or the issuance, distribution and/or transfer of token/coins

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

In general, the following classification of coins are made in Germany:

  • Crypto assets:Crypto assets are digital representations of a value that is not issued or guaranteed by any central bank or public body and does not have the legal status of currency or money but is accepted by natural or legal persons as a means of exchange or payment or for investment purposes by virtue of an agreement or actual practice and can be transmitted, stored, and traded electronically. E-Money and monetary values according to the German payment regulation do not form part of crypto assets. Crypto



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