What is a Token – ICOs Malta

We all know that tokens are the basis of ICOs. The last couple of months has seen an incredible boom in such Token Sales. Yet it seems that there exists a knowledge gap which is limiting some promising ideas to get to Market. This lack of understanding of the regulations is also putting promoters in danger.  The nature given to the token dictates the level of regulation your ICO will be subject to. Hence, prior to writing up a great white paper, we suggest you first think of how you are going to structure your token.

Types of tokens used in ICOs:

Utility tokens:

A Utility token is basically a token that used to acquire a service. These are basically keys used to unlock a service. Such tokens carry absolutely no rights with them other than to access to a service. Some would consider this as a pre payment for services.

Tokenised Securities:

While Utility tokens are easy to define, Tokenised securities are more objective. Therefore consider any token that gives rise to an obligation to be a tokenised security and thus be subject to regulation. Example of such obligations are:

  1. Profit participation.
  2. Share of Assets.
  3. Do any obligations exist towards token holders?

Token sales (ICOs) offering tokenised securities are most likely subject to regulation. However, do not take it for granted that Utility tokens sales are NOT subject to any regulation.

So, again, you need to take great care when structuring your token offer. At E&S we can assist you in formulating your token offer. Contact us directly on +356 20103020 or by mail at [email protected] for further information. You can also chat with us below!