Amid the lexicon of hyped terms such as “blockchain” and “cryptocurrencies”, a new fundraising technique is now gaining ground: Initial Coins Offerings (ICOs). ICOs are reported to have raised several billions in recent months and should move ahead unabated.  As this blockchain-based financing technique brings together a dense community of divergent companies from different industries, a number of questions have emerged.  In Belgium, ICOs and cryptocurrencies have not yet acquired a regulatory or legal status. The Belgian regulator (FSMA) issued a press release dated 13 November 2017, based on a ESMA statement, asserting that any ICO might be subject to the following regulations:

  • Prospectus Directive
  • Directive on Markets in Financial Instruments (MiFID)
  • Directive on Alternative Investment Fund Managers (AIFMD)
  • Regulation on Market Abuse (MAR)
  • Directive on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (AMLD4).

ICOs might also be subject to any other regulation touching upon accountability rules, tax duties, e-money or relevant Belgian domestic laws (eg the law dated 18 December 2016 on crowdfunding).

The central difficulty in conducting legal assessments for ICOs lies in the categorisation of the tokens to be issued. As their features may vary, tokens might be denominated as payment tokens (coins), security tokens, or utility tokens. Based on these unofficial terms, the regulatory treatment of different ICOs will be expected to differ significantly.

Considering that no international or European regulation has been put in place to date, states might decide to pass legislation at their own pace.