CSSF "Warnings": ICOs, Tokens And Cryptocurrencies – An Unregulated Area

On 14 March 2018, the Commission de Surveillance du Secteur Financier ("CSSF") released two publications entitled "warnings" on initial coin offerings ("ICOs") on the one hand, and tokens and cryptocurrencies on the other hand.

Even though the CSSF warns investors of the risks inherent in cryptocurrencies and fundraising through ICOs, it recognises the innovative potential of blockchain technology within the banking sector.

ICOs are commonly used to raise funds in order to finance the launch of new cryptocurrencies or any other new projects. In return for this financing, digital coins or tokens, carrying electronic rights, are issued by the initiator and allocated to the participant.