CMVM announces legal framework for cryptocurrencies
Cryptocurrencies will be subject to the pre-existing laws applicable to transferable securities both at European and national level. Launching an ICO in Portugal will be regulated.
Certain cryptocurrencies in Portugal will be seen as transferable market securities, according to the Portuguese Securities Market Commission (CMVM).
The Portuguese Securities Market Commission (CMVM) has been on the watch out for these tokens possible launches through the Initial Coin Offerings (ICO) and advises whoever has plans to launch any cryptocurrency should contact CMVM first and foremost.
In addition, if they meet certain technical specificities they should as well present a summary of their project to the agency, depending upon CMVM’s seal of approval.
The entity headed by Gabriela Figueiredo Dias alerts companies that are planning to pursue ICO’s to the “need of evaluating the legal nature of the token that will be issued” as some tokens might be taken care of by CMVM just the same way as they take care of transferable securities, and consequently is subject to the same legal framework.
“ICO’s are operations that intend to obtain public financing through the emission of tokens or coins, and, usually, provide rights and functionalities related to the project they intend to finance. As they are quite similar in many aspects to transferable securities, the entities involved with ICO’s should bear in mind that if the token offers are in line with the securities market regulation, the same legal framework will be applied.”
Given their [cryptocurrency’s] complexity CMVM considers that it will be utterly necessary to evaluate each case individually. There are many different variables for each ICO. In certain cases, CMVM also announced that the cryptocurrency issuers might have to publicize their offers and be forced to wait for an official approval from CMVM.
This is the first time that CMVM announces that it will regulate the cryptocurrency market with such detail, as up until now it only focused on spreading information on the new currency to the market.
These assets will be subject to applicable law after all. Cryptocurrencies were believed to be a completely deregulated medium of exchange, but this transaction will start being regulated in Portugal through CMVM.
For any doubts that might arise for ICO issuers, the commission has announced an e-mail account to reply to any queries: fintech@cmvm.pt.
