ICOs and Token Events: Raising Capital with Blockchain
Issuing a token to finance a project is possible, and Switzerland is one of the most credible jurisdictions for doing so. But a token event (ICO, IEO, STO) is not “raising money without rules”: it is a capital-raising operation that must be framed beforehand, not afterwards. Here is how it is structured correctly.
First of all: what token are you issuing?
Everything starts with the classification under FINMA practice, because it determines which rules apply. The three reference categories:
- Utility token: gives access to a service or a platform. If it has a real functional use already at launch, it is normally not treated as a security.
- Payment token: acts as a means of payment. It does not embody rights towards the issuer, but it fully triggers anti-money-laundering obligations.
- Asset / security token: embodies financial rights — participation, dividend, share of debt. It is treated as a security, with the associated prospectus and conduct obligations.
Many tokens are hybrid, and the category can change over time (an “investment” token at the moment of the pre-sale that becomes a “usage” token at launch). Getting the classification wrong upstream is the most costly mistake: that is why, where needed, a legal opinion is produced to capture the perimeter.
The elements of a well-structured token event
- Issuing entity. An adequate corporate structure is needed — often a Swiss company, sometimes flanked by a foundation — with real governance, capital and substance. “Empty” structures pass neither due diligence nor banking.
- Whitepaper and terms of issue. A technical and legal document describing the project, the rights conferred by the token, the risks and the use of the funds raised. It must be consistent with the chosen classification.
- AML safeguards. Identification of subscribers (KYC), transaction monitoring, travel rule. For payment tokens these obligations are central and must be handled through a supervised financial intermediary.
- Tokenomics and taxation. Distribution, vesting, accounting treatment of the funds raised and taxation at company level: the raise has effects on the balance sheet and taxes that must be planned before launch.
- Crypto-friendly banking. Operating accounts and conversion accounts: a practical bottleneck to be solved in advance, not once the raise is under way.
The authorised perimeter: where you go through a partner
Some activities connected to a token event are subject to authorisation and cannot be improvised. Among them:
- Financial intermediation and the management of AML safeguards, which requires affiliation to an SRO (self-regulatory organisation) or being brought under a supervised entity.
- The custody of tokens on behalf of third parties and services as a virtual asset service provider (VASP).
- The placement of security tokens with the public, with the related obligations.
The rule is clear: regulated activities go through an authorised entity. SIH ONE handles structuring and advisory — classification, legal opinion, corporate structure, whitepaper, tax and accounting coordination — while activities requiring a FINMA/SRO authorisation are carried out through authorised partners, until and unless the perimeter is formalised differently.
Why the sequence matters
The most common mistake is to reverse the order: the raise is announced, subscriptions are opened, and only afterwards is the classification addressed. At that point, correcting course is very costly — in time, in reputation and, if the token was in fact a security placed without the safeguards, in legal exposure. A serious token event starts from the classification and builds everything else on top of it.
This content is informational and does not constitute legal, tax or financial advice. The crypto perimeter evolves: every project must be verified in the specific case.
Are you considering a token event to finance your project? We start from the classification and build a solid structure, with the right partners where authorisation is needed. Let’s talk about it.