Argentine Securities and Exchange Commission Issues Communique on Initial Coin Offerings

Like Securities and Exchange Commissions in other parts of the world, such as of  the United Kingdom, the USA, China, Hong Kong and Brazil, the Argentine Securities and Exchange Commission (“CNV” after its acronym in Spanish), recently issued a communique on Initial Coin Offerings (“ICOs”) to warn investors of their potential risks.

The CNV clarified that ICOs would not, in principle, be subject to capital markets’ regulations. Nevertheless, it also stated that certain ICOs may be subject to the control of the CNV, depending on their structure and particular characteristics.

The communique also warns investors about the following potential risks associated with ICOs: (a) lack of specific regulations, (b) price volatility and liquidity risks, (c) probability of fraud, (d) inadequate access to relevant information, (e) early stage of the projects, (f) probability of technological and infrastructure failures, and (g) transnational nature of transactions involving ICOs.

Finally, although the CNV states that ICOs are not —in principle— subject to specific CNV control, the communique clarifies that claims may be filed with the CNV in those cases where there is a suspicion that an ICO could be fraudulent.