What has happened?
The Jersey Financial Services Commission (JFSC) has issued a guidance note on its approach to initial coin offerings (ICOs).
What does this mean?
The JFSC said that the ICO guidance aims to create a transparent process for ICOs to obtain consent from it to issue tokens and raise capital in Jersey.
The guidance also sets safeguards that token issuers must put in place to protect against scams and ensure money laundering checks are done.
However, the JFSC stressed that while it does not regulate ICOs or the companies that issue them, under this framework, it does require them to satisfy minimum standards.
ICO issuers are also required to appoint a regulated trust and company service provider to administer the company.
The main elements covered by the guidance note are:
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Classifications of ICOs in Jersey (ie security v non-security tokens).
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General requirements for all ICO issuers, including being incorporated in Jersey, audit requirements or receiving consent before undertaking any activity.
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JFSC requirements on ICO issuers in Jersey, which includes sound business practice policy and AML/CFT requirements, risk management procedures, marketing materials, ongoing reporting requirements.
In developing the guidance note, the JFSC consulted with Government of Jersey and industry.
Mike Jones, Director of Policy commented:
“This represents an innovative and pragmatic approach to the treatment of ICOs in Jersey. It illustrates our commitment to fintech developments more generally, but at the same time reflecting our guiding principles of consumer protection, countering financial crime and protecting the reputation and best economic interests of the Island.”
The guidance note follows in the wake of several high-profile crypto ventures launching from Jersey, including the signature of a memorandum of understanding between Binance and Digital Jersey, which acts as a central point of contact for anyone looking to establish a digital business on the island.
In December 2017, the JFSC published a warning about the risks linked to ICOs.
[View source.]
