CSSF Warnings On ICOs, Tokens And Cryptocurrencies

CSSF Warnings on ICOs, Tokens and Cryptocurrencies

FinTech leads the way in the rapidly changing world of financial services, and the industry is keen to position Luxembourg as an innovation hub. Among the cognoscenti, buzzwords such as blockchain, initial coin offerings, tokens and cryptocurrencies are being used to encapsulate new ways of doing business and demonstrate market leadership, but such enthusiasm should not obfuscate the risks. Against this background, the two warnings that the Luxembourg regulator (Commission de Surveillance du Secteur Financier (CSSF)) has issued on (i) initial coin offerings (ICOs) and tokens and (ii) cryptocurrencies respectively are useful in these intense times of innovation and strong investors' appetite. In these warnings, the CSSF, while it acknowledges the advantages that the so-called underlying "blockchain technology" can bring when used in financial sector activities and innovative projects, also cautions the public on the