Body
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
In Spain, there is no specific regulation on tokens as units of value. However, if the tokens are massively offered as an investment object, mediated by advertising activity, they will be subject to the control of the CNMV.
It is usual that only experts enter into ICOs and token issuance. However, as explained in paragraph f) above, Bank of Spain and the CNMV have in the joint communicates advised against ICOs and cryptocurrencies.
Legal affairs
Presence of any explicit regulation on ICOs and the issuance of token/coins
ICOs and the issuance of token are not regulated in Spain and are financial products that are not recommended by the CNMV and the Banco de España because of their high risk.
There is not any protection for these products, in contrast to deposits in banks.
So far, no ICO has been registered or authorised in Spain. This means that there is not any ICO in Spain that can benefit from any protection or guarantee.
Presence of any explicit restrictions on ICOs or the issuance, distribution and/or transfer of token/coins
As mentioned in paragraph f) above, Bank of Spain and the CNMV have in the joint communicates advised against ICOs and cryptocurrencies.
Obligations and requirements to issue token/coins
As mentioned, the issuance of token/coins is not regulated in Spain and it is not possible to obtain a license.
Classification of token/coins in the jurisdiction
In Spain, token/coins are not recognised in any manner.
Presence of a duty to publish a prospectus bevor offering token/coins to investors
To the extent that they can be considered as securities, ICOs may fall within the prospectus filing requirements of the Spanish stock market law (“LMV”) as the definition of financial instruments and negotiable securities is very wide (article 2 LMV), and the Spanish government can add new types of securities by its own fiat without an amendment of the law being necessary, provided this has been agreed under EU regulations.
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
Law 10/2010 dated 28 April, on the prevention of money laundering is widely drafted regarding the parties which are subject to it. Article 2 expressly mentions entities of electronic money, foreign exchange or money transfer companies, depositors or custodians or funds or payment means all of which may trade or deal in one way or another in cryptocurrencies, and therefore become subject to money laundering supervision. On top of this, the EU directive (2015/849/EU) will also extend the requirements to entities providing services to safeguard private cryptographic keys to hold, stoke or transfer virt