Outlines of when cryptographic tokens would be treated as securities and how each feature of a token sale should be governed by different laws in the country was issued by Lithuania’s Ministry of Finance.
An important trait in the suggested framework of Initial coin offerings (ICOs) guidelines has been shown, whether a token “grants profits or governance rights” to investors who acquire the token.
Different financial regulations should apply if a token grants profits or governance rights, though existing civil codes should only apply to all projects with tokens that can only be used as a payment tool or the power to access certain products.
In short, these features should be regulated by equal laws already in place in Lithuania, such as those governing securities, crowdfunding, and financial instruments markets.
Vilius Šapoka, Minister of Finance stated that “ICO market has not been regulated yet. It has huge potential but there are risks that we must manage. We should make our efforts for Lithuania to become the main headquarters for those ICO project promoters who are willing to operate in a transparent and orderly legal environment.”
The guideline, aside from adding to financial regulations, also outlines ideas from the country’s auditing, taxation, and financial crime investigation agencies concerning how tax and anti-money laundering rules should apply.
(Photo Credit: Lithuania)