Investor Claims, Regulatory Enforcement and Criminal Proceedings within the Frame of Initial Coin Offerings

In 2017, the number of Initial Coin Offerings (ICOs)/token-generating events (TGEs) exploded in Switzerland, surpassing and disrupting traditional venture capital investment. Switzerland, and in particularly its renowned Crypto Valley, has emerged as a global hub for ICOs. Under current Swiss law, there is no specific investor protection around ICOs. ICO organizers and their related set-up companies (charitable foundations or other corporate companies registered in Switzerland) are however not untouchable. Civil claims, criminal proceedings, and Swiss Financial Supervisory Authority (FINMA) investigations may be initiated against them. The initiation of such actions may prove to be more complex than for matters unrelated to the blockchain technology in particular due to the challenge for traditional principles of jurisdiction posed by the existence of the decentralized ledger and the possible use of anonymity though encryption. Despite that fact and that there is no relevant case law and consistent legal doctrine yet, the existing Swiss legal framework provides some room for investors to initiate legal actions.

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