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

Local regulators are still cautious as to financing transactions based on virtual currencies. As indeed highlighted by the Bank of Italy, virtual currencies are not to be used in order to finance ICOs, due to their volatility, the price uncertainty and the impossibility for the regulator to fully supervise them. There is also regulatory pressure for firms dealing with virtual currencies to comply with anti-money laundering rules, as long as those firms are able to convert virtual currencies into state legal tender (and vice versa).

Legal affairs

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

Tokens/coins issued through an ICO may have very different characteristics and serve different functions. In light of that, depending on the specific characteristics of the product, tokens and coins could be considered by competent authorities as financial products (or, in some specific circumstances, as securities), which are regulated products. In such cases the selling and/or offer of, or advice towards, among others, tokens and coins could be carried out only by entities or persons duly authorised by and enrolled with the competent authorities. This was confirmed by CONSOB, which in many recent decisions blocked the offering to the public of tokens because the offering was carried out in breach of the statutory and regulatory framework applicable to financial products.

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

Tokens or coins that qualify as financial products can be issued, distributed, or offered only by firms duly authorised by the Bank of Italy and CONSOB.

Obligations and requirements to issue token/coins

Tokens or coins that qualify as financial products can be issued, distributed or offered only by firms duly authorised by the Bank of Italy and CONSOB.

The licenses normally needed in such instances are those for “investment companies” and “regulated venues”.

Classification of token/coins in the jurisdiction

The ICOs Report sets out certain features which may indicate that a token/coin is a financial instrument or, more broadly, a financial product.

Specifically, token/coins which are tradeable, incorporate an investment value and which are sold with a business purpose, are likely to be looked at as “financial products” and, thus, be regulated as such.

Also, based on the rights granted to the token/coin holder, the token and or coin may be considered as a financial product (such as securities).

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

Yes, to the extent the ICOs involve financial instruments or financial products.

Presence of AML/KYC requirements that are needed to be fulfilled regard

ing (i) the initial issuance of token/coins and (ii) any following transfer of token/coins to third parties The issuance, trading, custody, and e-wallet services are subject to AML/KYC requirements (see Sec. 4 below).

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

The ICOs Report raises awareness on opportunities and risks associated with ICOs, notably on anti-money laundering and fraud, and calls for a harmonised framework at the EU level.

Economic conditions

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

Data has not yet been made available by CONSOB.

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

The ICOs Report points out that, during the pandemic, fraudulent ICOs have increasingly been detected by the Regulator, including “covid-token” to be sold to local investors.



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