All tokens and cryptocurrencies are securities even if they do not have signs of securities, New Zealand's Markets Authority has said in a commentary.
According to the Financial Markets Authority (FMA), “all tokens or cryptocurrencies are securities under the FMC Act – even those that are not financial products.”
The regulator clarifies that a token offered via an ICO may be classified as a financial product (debt or equity securities, managed investment products and derivatives) depending on its specific characteristics and economic substance.
The FMA's comment sets out the legal obligations for providers of cryptocurrency-related services, such as exchanges, wallets, and broking. According to FMA, such providers must comply with the following requirements: be registered on the Financial Service Providers Register (FSPR), pay the applicable fees and levies, comply with the fair dealing provisions and with anti-money laundering obligations.
The financial authority of New Zealand urges cryptocurrency start-ups to contact them early in the development phase before conducting ICOs.
“Given the bespoke nature of cryptocurrency-related financial services, we encourage you to approach us early about the services you plan to offer. We are happy to discuss requirements with you and your legal advisers on an individual basis.”