New Zealand’s FMA: all tokens are securities

New Zealand’s Financial Markets Authority publishes commentary ICOs and cryptocurrency services 
27 October 2017   2249

New Zealand’s Financial Markets Authority publishes guidance on ICOs and cryptocurrency services, as the FMA wants to "facilitate responsible innovation, and ensure that the regulatory regime remains relevant and agile". 

Initial coin offerings 

The extent to which an ICO is regulated depends on whether a "financial product" is being offered to retail investors in New Zealand. The Financial Markets Conduct Act 2013 sets out four types of financial product:

  • debt securities
  • equity securities
  • managed investment products
  • derivatives.

The FMA further explains each type of the product in detail. What's important, it has been clearly stated that all tokens are to be considered securities.

All tokens or cryptocurrencies are securities under the FMC Act – even those that are not financial products. A security is any arrangement or facility that has, or is intended to have, the effect of a person making an investment or managing a financial risk. If appropriate, we can designate any security to be a particular financial product based on its economic substance.
 

The FMA guidance

The guidance also highlights that crowdfunding in the form of an ICO is not the same as crowdfunding covered by the FMC Act. The FMA licenses crowdfunding platforms to provide an intermediary service via a facility, such as a website, where companies make offers to retail investors. Crowdfunding under the FMC Act enables companies to raise up to $2 million in any 12-month period, without registering a PDS.

It is stressed that the ideas regarding the possible regulation of ICOs and token offerings include creating a new category of prescribed intermediary service similar to the equity crowdfunding model. This would require law reform and that can take a long time. 

Cryptocurrency services

Tokens and cryptocurrencies that are not financial products or services must comply with the Fair Trading Act 1986 to the extent that they are “in trade.” Notably, the Fair Trading Act also applies to tokens and cryptocurrencies that are offered in New Zealand but based overseas.

The FMA points out that the FMC Act does not cover crowdfunding via ICOs, and encouraged stakeholders to engage in conversation with the regulator “early in the development phase if you’re considering making an offer.”

Telegram Open Network May be Launched in Q3 2019

According to the documents received by the media, the platform has been successfully tested
24 May 2019   62

The blockchain platform Telegram Open Network (TON) will be launched in the third quarter of 2019. It is reported by The Block, citing investors of the project, who allegedly received letters with this information.

According to the documents received, the platform has been successfully tested. His results confirmed the conformity of the blockchain and the consensus algorithm to the goals stated in white paper.

The testing period reaffirmed the assurance that the TON virtual machine and the consensus algorithm are able to achieve the goals described in the original white paper, a letter to investors said.

Closed testing of TON started in April. The possibilities of the blockchain platform were tested by several professional teams consisting of developers from different countries of the world, including Russia.

Finally, the platform should be launched no later than October 31, 2019. Otherwise, all agreements for the purchase of Gram tokens with the project investors will be canceled.