Global FinTech Guide
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

Virtual currencies and ICO’s are regarded cautiously due to recognition of the risks but also the benefits of virtual currencies and the underlying blockchain technology.

In a similar vein to its warnings on crypto currencies, the Irish Central Bank has warned customers of the high risks associated with Initial Coin Offerings in its ‘Alert on Initial Coin Offerings Information Notice’ from December 2017. The Central Bank noted that Investors should be aware of the following issues with ICO campaigns:

  • unregulated activity, vulnerable to fraud or illicit activities.
  • high risk of losing all invested capital.
  • lack of exit options;
  • extreme price volatility;
  • inadequate information; and
  • flaws in the technology.

Legal affairs

Presence of any explicit regulation on ICOs and the issuance of token/coins

Previously, there was no specific regulation on ICOs and the issuance of token/coins in Ireland. Existing legislation would cover an ICO: If the token issued was deemed a “transferable security”, then MiFID or the Prospectus Directive could apply.

However, under the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2021 we do have clearer guidance and regulatory requirements for issuers that fall under the category of a Virtual asset service providers (“VASPs”). If token/coins are classified as Virtual Assets (“a digital representation of value that can be digitally traded or transferred and can be used for payment or investment purposes”) then the issuance, distribution and or transfer of said token/coins will be caught under the list of activities carried out by a VASP, specifically the “transfer of virtual assets” and “participation in, and provision of, financial services related to an issuer’s offer or sale of a virtual asset or both.

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


Obligations and requirements to issue token/coins

Once categorised as a VASP, coin/token issuers will be subject to registration requirements with the Central Bank of Ireland. 

If the issuance of token/coins issued is deemed a “financial instrument” or “transferable security”, then they may require authorisation as a trading platform.

If the issuer is trading in token/coins and they accept and hold funds on behalf of investors, they may also be caught by legislation which requires a Banking Licence.

Banking licenses can cost circa €25,000 and the application process can last from 1-2 years.

Classification of token/coins in the jurisdiction

There is no clear guidance as to the status of tokens/coins in this jurisdiction. Rather, their status must be considered on a case-by-case basis, for example if they are a “Virtual asset” they will fall under the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2021 or if they are considered “transferable security”, or some other form of 'financial instrument' then they will come within the scope of the Prospectus Directive or MiFID II. 

If a Token is akin to a traditional form of security or a share, the more likely it will fall within the MiFID II Regulations. Similarly, if a token/coin offering involves an ‘offer to the public’, then it is likely they could be caught by the Prospectus Directive.

Presence of a duty to publish a prospectus bevor offering token/coins to investors

If a token/coin offering is classified as “transferable security” under Article 4.1(44) of MiFID II, there is a duty to publish a prospectus in Ireland unless certain exemptions apply. Such exemptions include the offering to “qualified investors” and certain monetary thresholds.

Presence of AML/KYC requirements that are needed to be fulfilled regarding (i) the initial issuance of token/coins and (ii) any following transfer of token/coins to third parties

Virtual asset service providers (“VASPs”) operating in Ireland are subject to Ireland’s AML/CFT framework as a result of the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2021.

In order for approval of an application for registration, the CBI must be satisfied that (amongst other things):

  • the firm’s AML policies and procedures are effective in combatting the money laundering and terrorist financing (ML/TF) risks associated with its business model; and
  • the firm’s management and beneficial owners are fit and proper.

Firms applying for registration will have to apply form to the CBI together with supporting documentation including:

  • a copy of the firm’s AML policies and procedures;
  • a copy of the firm’s ML/TF risk assessment;
  • details of all direct and indirect ownership and management in the firm;
  • individual questionnaires to assess the fitness and probity of all individuals who are proposed to hold preapproved control functions (PCFs) in the firm;
  • a business plan setting out the firm’s proposed activities, transaction flows, projections and any outsourcing arrangements envisaged;
  • details of the firm’s proposed organisational structure, AML reporting lines and staffing arrangements; and
  • details of the firm’s AML/CTF training plan.

Additional comments regarding (i) the legal situation for ICOs/token/coins and (ii) any following transfer of token/coins to third parties

‘MiCA’, the European Union’s proposed Regulation of Markets in Crypto-assets, will also affect FinTechs that plan to issue tokens/coins on any basis, ICO included.

Economic conditions

Market size for ICOs/token sales and existence of any previous regulated ICO/token sales in the jurisdiction

No data available

Additional comments regarding the economic situation for ICOs/token sales or what companies must be aware of in this business area




© 2022, Philip Lee LLP. All rights reserved by Philip Lee LLP as author and the owner of the copyright in this chapter. Philip Lee LLP has granted to Multilaw non-exclusive worldwide license to use and include this chapter in this guide and to sublicense Lexis Nexis, a division of RELX Inc. and its affiliates certain rights to use and distribute this guide.

The information in this guide provides a general overview at the time of publication and is not intended to be a comprehensive review of all legal developments nor should it be taken as opinion or legal advice on the matters covered. It is for general information purposes only and readers should take legal advice from a Multilaw member firm.


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