The Bank of Lithuania is the first of market regulators to issue guidelines on security coin offerings (STO’s).
The guidelines are focused on the classification of the tokens and clarify on applicable legal regulation. Marius Jurgilas, Member of the Board of the Bank of Lithuania said:
“The current focus on security token offerings (STOs) is taking over the waning interest in initial coin offerings (ICOs). Businesses are interested in this particular way of raising capital as an alternative to bank lending. The Guidelines on Security Token Offering are aimed at explaining our position in this regard rather than creating new regulatory arrangements. In a strict regulatory environment, such as the securities market, it becomes crucial to set rules in order to avoid any miscommunication, misunderstandings, and consequences.”
Firms that plan to leverage the benefits of STOs will have to work out if their assets are regulated financial instruments and therefore comply with both European Union and national legislation concerning fund-raising activities.
If the market participants are not sure if the tokens are required to have regulation, the bank will provide help. Mr Jurgilas commented:
“In case market participants are not sure whether their offered tokens are subject to regulation, we stand ready to provide them with consultation on this matter.”
This market has been begging for some regulation after some negative press due to scams and illegal fundraises. Could the Bank of Lithuania be the first of many to adopt this new legislation?
Share
