Lithuana’s central bank has become the latest financial institution of its kind of release new guidance for those seeking to organize an initial coin offering (ICO) in the country.
The four-page position note features two sections: one that largely reiterates a 2014 statement effectively banning banks and financial institutions from handling or otherwise working with cryptocurrencies, and another that hones in on the issue of ICOs. It comes on the heels of similar statements from other central banks regarding the legal ramifications of such offerings.
On the question of ICOs, or the sales of cryptographic tokens commonly used to bootstrap a new blockchain network, the central bank outlined a number of national laws that could apply – depending on the characteristics of the project and the function of the token itself.
Marius Jurgilas, one of the central bank’s board members, said in a statement:
“Notwithstanding the fact that such activities are not regulated, in their essence, they are the raising of funds from investors, often unprofessional, to finance some activity. Since the risk of losing investors’ funds and other risks are particularly high, our position is that such offering, in certain cases, should be subject to investment related legislative requirements and restrictions.”
The central bank said that Lithuania’s laws regarding securities, crowdfunding, collective investment schemes and the offering of financial services more broadly could impact the blockchain use case, per the text of the position note.
At the same time, the institution clarified that there is no specific piece of regulation regarding ICOs – a factor that both organizers and investors should bear in mind when moving ahead with any launch plans.
“It should be noted that, when deciding on the application and scope of specific legislation of the Republic of Lithuania for specific ICO, the conditions of the relevant ICO should be analysed and assessed,” the document states.
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