Mark Branson, the CEO of Switzerland's official financial watchdog, the Financial Market Supervisory Authority (FINMA), has revealed that the regulator will retroactively evaluate ICOs that have already taken place in the country to determine whether they were carried out in a way that is compatible with the ICO guidelines it released last month.
"We will judge the ICOs that were already done in Switzerland along this template or this grid. That makes our work easier when looking at these ICOs to see if they would have been subject (to the guidelines)," Branson reportedly said on March 27.
The document in question relates that certain types of cryptocurrencies are considered securities, namely, asset-backed tokens, tokens offered in a presale event that are tradable (in the form of claims on tokens-to-be-issued) before the launch of their native blockchain, and those which "represent assets such as a debt or equity claim on the issuer … for example, a share in future company earnings or future capital flows."
According to Swiss law, the only requirement on the issuance and trade of "uncertificated securities" is that the number issued, the denomination in which they are issued, and the identity of the creditors holding them must be recorded. The guidelines allow for this recording to take place "digitally on a blockchain."
However, the document also states that the act of "offering tokens constituting securities of third parties publicly on the primary market, is, if conducted in a professional capacity, a licensed activity." Furthermore, the act of issuing security-tokens "can also result in prospectus requirements under the Swiss Code of Obligations."
ICOs that rely on third parties for fund management are subject to the Collective Investment Schemes Act, which requires "Licensees (authorised parties) and their agents" to act "exclusively in the interests of the investors" and "pursue an investment policy that … corresponds with the investment characteristics … as set out in the relevant documents."
Another potentially relevant provision of that law states:
"In respect of the purchase and sale of assets and rights on [licensees' and their agents'] own behalf as well as that of third parties, they are only entitled to receive the fees specified in the relevant documents. Commissions and other financial benefits must be credited to the collective investment scheme."
Branson said that the guidelines had generally been well-received.
Switzerland has hosted a number of high-profile cryptocurrency fundraising events, including the Tezos ICO, which brought in bitcoin and Ether worth some $232 million at the time, and the Ethereum presale.
It's unclear whether FINMA will be inclined to take any action against offending entities, even if the laws invoked by the guidelines authorize it to do so.
In January 2018, the economics minister said that Switzerland should attempt to "become the crypto-nation." Government bodies sympathetic to this goal may not want to appear too strict in their enforcement of regulations.