The cryptocurrencies is a fairly new phenomenon for international law. Even though development of cryptocurrencies began more than 8 years ago, this is beginning to gain momentum for the last year. Today, representatives of the majority of states openly speak about the need for legal arrangement of the crypto industry. The first regulatory acts defining the legal status of cryptocurrencies and their transactions have been recently adopted in some countries and will be adopted in the near future in many others.
In Japan, cryptocurrencies are defined as a means of payment, in Switzerland, it is tangible assets, and as a private currency in England. Crowdsale in China was banned, and all companies that have already spent TGE were strongly asked to return funds to investors, as well as all exchange areas.
In the US, tokens can be recognized as goods or securities: in the opinion of the US government, tokens are securities if they are an investment of tangible assets in common with other persons the case from which the profit is provided, and profits arising from the actions of the third persons, and not the investor itself.
Regulation of the cryptocurrencies is not yet defined by lawmakers as new institutions of law. Instead, regulators are attempting to draw a direct analogy between the cryptocurrencies and existing economic and legal institutions, which leads to a narrow understanding of the nature of the cryptocurrency, their role, and value.
Due to the fragmentation of legal system, the innovation of crypto-economy and its international spread, the actions for conducting ICO (or ITO (Initial Token Offering) or TGE (Token Generating Event) have so far not received any special legal regulation in any jurisdiction. “Cryptocurrency is an independent means of payment and questions about its legal norms are still floating in the air,” — Decidex.io cryptocurrency exchanges experts say.
Today, the TGE does not have a legal definition, neither the legal status of the organizers, the users in the TGE, the mediators in its conduct, nor the regulatory requirements for the procedure for its conduct are legally defined.
At the state level, the legal regulation of the TGE is carried out on the basis of an already existing regulatory framework that can determine the state’s attitude to the cryptocurrencies (to determine their status). Depending on the ratio of regulators to the currency, an administering framework is used to regulate existing legal relationships (securities transactions, currency transactions, etc.).
The use of existing legislation theoretically allows to determine the general rights and obligations of the organizers of TGE, purchasers of tokens, as well as their legal responsibility: civil law, tax, administrative, criminal. At the same time, there is no special legal legal authority for the organizers of the TGE at present.
Legal liability exists only in certain jurisdictional states for the use of cryptocurrencies, the performance of transactions with them on the territory of individual states, the performance of transactions by citizens of individual states: for example, the implementation of TGE tokens to US citizens is not recommended, since the released tokens can be recognized by the Commission on Securities and Exchange Commission (SEC) securities (as was recently done with the tokens issued by The DAO) and persons who issued such tokens may be held accountable for conducting the issuance of securities.