The Jersey Island, the dependency of the UK, has emitted a set of regulations so as to defend investors who prefer to go for ICOs.
This was announced by the local regulator, the Financial Services Commission (JFSC), last week. These measures are meant to be the guiding steps for companies planning ICOs.
The guidance document explains that the JFSC cannot control all ICOs. Nevertheless, each company wishing to do an initial coin offering will have to obey certain conditions.
Startups wishing to perform a coin offering, will be obliged to ensure anti-money laundering and counter-terrorist financing activities. Additionally, they must take all necessary steps to minimize the risk of ordinary investors taking part in the event.
The guidelines explain that any coin issuing entity must provide its potential investors with a complete set of data about the risks connected with coin offerings. Potential participators should be warned about the fact that ICOs are very speculative and that they mostly are not controlled by market authorities.
All this is a part of a special form that investors have to fill in and then submit.
Types of ICO tokens
In the document, the JFSC explains that ICO tokens can be security and non-security ones. A security token can be similar to securities, which circulate in the traditional market, i.e., they give one the right to receive their percentage of profits of the company.
If a token is a non-security one, it can be divided into two categories: a utility coin and a crypto coin. The first one gives investors an opportunity to receive a product or service of the emitter and the second one is just developed to act as a currency.
The JFSC regulator considers softening some terms for non-security coins in special situations.
In June this year, the Binance crypto exchange stated its plans to set up a representative office on the Jersey Island.