The Faculty of Law at Oxford University have published an article summarising the current legal issues surrounding the ICO phenomenon.
The article, which is itself a summary of a longer publication by French law academic Iris Barsan based at Université Paris-Est Créteil, underlines the legal morass that has arisen on the back of the unorthodox start-up funding model.
“No Legal Vacuum”
It highlights what is arguably Barsan’s most important conclusion, namely that “there is no such thing as a legal vacuum or a regulation-free zone as some defenders of cryptocurrencies and ICOs might want to think.“
The Oxford law blog also provides an overview of Barsan’s discussion on the legal complexity of the ICO phenomenon. The issue, it states, is compounded by the many different hues of tokenized sales that exist with tokens variably being structured “as a security, as a loan, as a voucher or simply as a currency.“
Case-by-Case Approach “Only Practicable Approach”
Adding to the complexity are the different definitions applied to each of these terms across different legal jurisdictions. The practical ramifications are that ICOs tend to be treated on a case-by-case basis, an observation that is shared by UK-based legal outfit Osborne Clarke which specialises in legal concerns surrounding new technologies.
In an internally-commissioned report that was published in September, Osborne Clarke appear to conclude that within the current legal context a case-by-case approach is probably the “only practicable approach” to dealing with irregularities within the ICO arena. The view is also shared by Barsan.
The difficulty, of course, is defining the irregularities themselves. Barsan’s full paper remains arguably the most comprehensive academic coverage to date on ICOs and their legal ramifications in an international context. The piece, which is regularly updated, can be found here.