In this #32 issue of “Lexing Insights,” the members of the network focus on the “legal framework for ICO and cryptocurrencies”.

Enable the potential of digital finance while mitigating the risks

The craze for crypto-currencies (also known as crypto-assets) is growing. Nearly one in twelve French people hold cryptocurrencies (such as bitcoin, ether, ripple, binance coin). Initial Coin Offerings (ICOs), which are fundraising in cryptocurrencies, are also attracting more and more investors. However, the risks (particularly of fraud) associated with these operations are significant.

In a previous issue of Lexing Insights (#20) we already presented ICOs, which at the time were not subject to a clear legal framework. Today, the legal framework applicable to cryptocurrencies and ICOs is starting to become clearer. Even if the approaches adopted by national regulators remain disparate (ranging from the adoption of bitcoin as a legal currency in El Salvador to the destruction of mining farms with a Bulldozer in Malaysia), an harmonisation process is nevertheless emerging to protect consumers, including with the proposal for a European regulation on markets in crypto-assets (“MiCA regulation”).

The Lexing® network members provide a snapshot of the current state of play worldwide:

  • What is an ICO?
  • How to participate in an ICO?
  • What laws have been adopted in various countries around the world regulate ICOs and cryptocurrencies?
A world tour of rules on ICOs and cryptocurrencies

We start our world tour in South Africa, where amid the increasing number of crypto scams in the country, the authorities are considering taking measures to better regulate the sector and protect consumers. Our Lexing member presents us with the crypto regulatory landscape in South Africa that will be introduced in the not so distant future in the wake of the recommendations made by the Intergovernmental Fintech Working Group (IFWG), the obligations that would result from the regulations expected in 2022 and the benefits of implementing crypto regulations. It also provides an overview of the taxation of crypto-assets.

Then, back to Belgium to have an overview of the law of 1 February 2022 amending the 2017 Anti-Money Laundering Law in order to introduce provisions relating to the status and supervision of providers of exchange services between virtual currencies and legal currencies and providers of custody wallet services. Our Belgian member gives us insights into this law, which is introducing stricter regulations on crypto-assets.

Our Spanish member examines the legal framework applicable to crypto-assets under Spain‘s law (including the Royal Decree-Law 7/2021 of 27 April, Law No 11/2021 of 9 July 2021 and the Circular 1/2022 of 10 January of the CNMV).

Next step: France. Our French member reviews the legal framework of Initial Coin Offering and the steps to be taken with the AMF in order to obtain its optional approval and describes how to participate in an ICO.

Our world tour ends in Greece, where our Lexing member summarizes the legal framework applicable to ICO in its country.

The following countries have contributed to this issue: Belgium, France, Greece, Spain, South Africa.

Lexing International Newsletter “Lexing Insights” No. 32 – March 2022