Initial Coin Offering in Jersey

Our agents specialized in company formation in Jersey provide information on the ICO in Jersey and the regulations.

What is an initial coin offering in Jersey?

The initial coin offering (ICO) is a manner of acquiring funds from the public by using distributed ledger technology.

Although ICOs in Jersey are not subject to a specific regulatory framework, issuers must obtain consent from the Jersey Financial Services Commission (JFSC) under the Control of Borrowing (Jersey) Order 1958.

Issuers must also comply with anti-money laundering requirements, while additional regulations may apply depending on the nature of the tokens and the activities carried out.

Our agents specialized in company formation in Jersey discuss the main conditions for an ICO in this jurisdiction.

What are the general requirements for an ICO in Jersey?

The Jersey Financial Services Commission has issued a set of general requirements for companies that wish to become ICO issuers:

• the company issuing the ICO needs to be incorporated as Jersey company;
• receive the consent of the JFSC, under the applicable COBO law, before commending the offering;
• comply with the Sound Business Practice Policy and the relevant Anti-Money Laundering requirements;
• appoint and maintain a trust company service provider, licensed by the JFSC;
• comply with the ongoing audit requirements;
• implement procedures to mitigate the risk of inappropriate investments in the ICO.

The purpose of the guidelines listed above is to ensure a streamlined application process, under the applicable Control of Borrowing (Jersey) Order 1958 (COBO).

The issuer of the ICO in Jersey can only be incorporated as a Jersey company. Other business forms are not accepted.

What documents are required to launch an ICO in Jersey?

The application for launching an ICO in Jersey generally includes:

• •company documents;
• •legal proposal, outlining the ICO, the amount the company intends to raise, how the funds will be used and any regulatory matters;
• •white paper, explaining the project, how the tokens work, what rights investors receive and the risks involved;
• •token terms and conditions;
• •compliance documents.

The JFSC may ask for further documents or clarification after reviewing the application. Our team of specialists can assist with preparing the paperwork.

Is a white paper mandatory for an ICO in Jersey?

The white paper is a document detailing the important aspects of the project, essentially a business plan. In Jersey, the ICO white paper needs to comply with a set of content requirements that resemble the ones for a company prospectus, under the Companies Law 1991.

The white paper should describe how the token offering works, the terms of the sale, investors’ rights and the risks involved. It must also include relevant risk warnings, especially if the ICO is not regulated.

The JFSC must receive a draft before the ICO begins. Issuers do not need to prepare a separate white paper if their information memorandum meets the applicable requirements.

How does the JFSC classify ICO tokens in Jersey?

An ICO in Jersey is classified by the Commission in the following manner:

• •security token: this token usually shares characteristics associated with equity or debt security;
• •non-security token: this can either be an utility token or a cryptocurrency token and it is not deemed to be a security.
• •utility token: this offers the holder the right to access a certain product or service; it does not offer economic rights;
• •cryptocurrency token: this offers the holder the ability to treat it as a currency, by storing or exchanging it.

A company launching an ICO in Jersey will need to be mindful of the general requirements set forth by the JFSC irrespective of whether the token launched is considered a security for regulatory purposes or not.

While each application is treated separately, the JFSC may treat non-security tokens differently.

Our company formation specialists in Jersey can provide more details as needed, on a case-by-case basis.

How long does it take to launch an ICO in Jersey?

The JFSC aims to respond within 10 business days after receiving a complete application checklist and draft information memorandum. This does not mean the ICO will be approved within that period.

The process may take longer if the JFSC requests further information or if additional legal and compliance checks are needed.

How much does it cost to launch an ICO in Jersey?

There is no fixed cost, as each project has different legal and regulatory requirements.

Investors should budget for company registration, legal fees, preparation of the white paper, compliance checks and the services of a licensed trust company service provider.

Some projects may involve additional expenses, particularly if the token offering requires further regulatory approvals.

If you need a cost estimate based on you ICO project, our team can review your plans and provide a personalized quote.

Can foreign investors launch an ICO in Jersey?

Yes, provided they meet the requirements established by the JFSC. Investors must incorporate a Jersey company or limited liability company (LLC) to act as the ICO issuer. The company must also:

• •obtain the required consent under the Control of Borrowing Order 1958 (COBO);
• •appoint a licensed Jersey trust company service provider;
• •maintain a Jersey-resident director;
• •comply with applicable anti-money laundering and investor protection requirements.

Foreign investors do not necessarily need to relocate to Jersey to establish the issuing company. However, the JFSC reviews each ICO application individually, and additional regulatory requirements may apply depending on the nature of the tokens.

Contact us if you need help with the lunch of an initial coin offering in Jersey!