Cryptocurrencies are Securities -says NZ Financial Regulator
New Zealand’s financial regulator has published its official commentary on initial coin offerings (ICOs) and the use cryptocurrencies.
Thenew zea (FMA) of New Zealand has published an explanation of token events, insisting that ‘the extent to which an ICO is regulated depends on whether a “financial product” is being offered to retail investors in New Zealand.’ Debt Securities, equity securities, managed investment products and derivatives are the four categories of financial products determined by the authority’s Financial Markets Conduct Act in 2013. An ICO’s “specific characteristics and economic substance” would determine what type of financial product it is, the FMA said.
More pointedly, the regulator went on to add:
All tokens or cryptocurrencies are securities under the FMC Act- even those that are not financial products. A security is any arrangement or facility that has, or is intended to have, the effect of a person making an investment or managing a financial risk.
The regulator insists that its innovation-forward objectives will grant exceptions to ICOs and encouraged startups to approach the authority in their early development phase.
“We can also, if appropriate, grant exemptions to ensure FMC Act requirements are fit for purpose for ICOs. This may include modifying PDS [product disclosure statement] or governance requirements,” the FMA said.
Further, the authority affirmed that ICOs aren’t categorized as ‘crowdfunding’ under the definition of the term in New Zealand as crowdfunding platforms are specifically licensed by the authority.
Regulating the Cryptocurrency Industry
New Zealand-based token or cryptocurrency service providers and businesses such as exchanges, wallets and individual brokers are required to comply with certain legal obligations mandated by the Financial Markets Authority.
be a member of a dispute resolution scheme if the financial services are provided to retail clients
be registered on the Financial Service Providers Register (FSPR) for each category of financial service provided. Token or cryptocurrency issuers may be ‘operating a value transfer service’ or ‘issuing and managing means of payment’.
must comply with fair dealing provisions of the Financial Markets Conduct Act
comply with anti-money laundering obligations
The regulator urged investors to understand the risks involved in cryptocurrency investments, specifically with volatility and security.
The FMA wrote:
Consumers need to be aware that cryptocurrencies are volatile, their value can change quickly and they aren’t widely accepted in the same way as legal tender. The currency held in digital wallets is at risk of being stolen, just like a real wallet.
source:https://goo.gl/m4Hp1T
Hi! I am a robot. I just upvoted you! I found similar content that readers might be interested in:
https://www.cryptocoinsnews.com/tokens-cryptocurrencies-securities-says-new-zealands-financial-regulator/
Hello & Cheers!! I'm a content detection and information bot. You are receiving this reply because a short link or links have been detected in your post/comment. The purpose of this message is to inform your readers and yourself about the use of and dangers of short links.
To the readers of the post: Short links are provided by url shortening services. The short links they provide can be useful in some cases. Generally their use is benign. But as with all useful tools there are dangers. Short links can be used to hide all sorts of things. Quite frequently they are used to hide referral links for instance. While not dangerous this can be deceptive. They can also be used to hide dangerous links such as links to phishing sites, sites loaded with malware, scam sites, etc. You should always be extremely cautious before clicking on one. If you don't know and trust the poster don't click. Even if you do you should still be cautious and wary of any site you are sent to. It's always better to visit the site directly and not through a short link.
To the author of the post: While short links may be useful on some sites they are not needed on steemit. You can use markdown to format your links such as this link to steemit. It's as simple as
[steemit](https://steemit.com)Unlike short links this allows the reader to see where they are going by simply hovering over the link before they click on it.