The Swiss Financial Market Supervisory Authority (FINMA) issued guidance on initial coin offerings (ICOs) on 29 September. FINMA has observed a marked increase in ICOs conducted in Switzerland. It has therefore published FINMA Guidance 04/2017 on this topic. FINMA has also indicated that it is investigating a number of ICO cases to determine whether Swiss regulatory provisions have been breached.

FINMA observes that the structuring of ICOs from technical, functional and business standpoints varies markedly from offering to offering. ICOs are currently not governed by specific regulations, either globally or in Switzerland. Swiss legislation on financial markets is principle-based; one such principle is technology neutrality. Collecting funds for one’s own account without a platform or issuing house is unregulated from a supervisory perspective in cases where repayment is not obliged, payment instruments have not been issued and no secondary market exists.

However, depending on how an ICO is structured, some parts of the procedure may already be covered by existing Swiss regulations. This concerns the following regulatory provisions in particular:

• combatting money laundering and terrorist financing;

• banking law;

• securities trading; and

• collective investment scheme legislation.

Given the close resemblance, in some respects, between ICOs/token-generating events and conventional financial-market transactions, one or more aspects of Swiss financial market law may already cover ICO campaigns according to their various models. FINMA is currently looking into a number of different cases.