The Jersey Financial Services Commission has issued a 'guidance note' containing information about its approach to initial coin offerings.

ICOs are a digital way of raising funds from the public using distributed ledger technology. The note details the JFSC’s approach to businesses that wish to launch ICOs in Jersey. The note sits alongside the risk warning for potential investors in ICOs issued by the JFSC in 2017.
 
The note aims to impose controls to help reduce some of the risks associated with ICOs. Under these arrangements, the JFSC does not regulate the ICOs or the companies that issue them, but it does require the companies to live up to certain standards and to appoint regulated trust and company service providers to administer them.  In writing the note, the JFSC has consulted the Jersey government and the firms it regulates.

Mike Jones, the JFSC's director of policy, commented: “This represents...our guiding principles of consumer protection, countering financial crime and protecting the reputation and best economic interests of the island.”

In the meantime, the minister for external relations, Senator Gorst, is arguing that Jersey is aiming for "a balanced regime: on the one hand, Jersey’s treatment of exchanges and ICOs is
permissive and promotes innovation and new enterprise; on the other hand, safeguards are in place to protect investors from harm and to mitigate some of the financial crime risks associated with cryptocurrencies...as things develop in this rapidly-moving industry.

Simon Schilder, a partner at the law firm of Ogier in Jersey and specialist investment fund lawyer, told Compliance Matters: “This guidance noterepresents an innovative and balanced approach to the treatment of ICOs, providing certainty for their structuring through Jersey. Whilst Jersey will not regulate ICOs or the companies that issue them, it will require that such companies satisfy certain minimum standards."