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Companies and projects have increasingly relied on the sale of digital assets, or tokens, as a means of fundraising. These tokens generally do not grant the holders an ownership interest in the issuing company or project, but may provide governance rights, access rights or other utility. This has been conducted through public sales known as initial coin offerings (ICOs), proliferation through token generation events (TGEs) or private sales, among other mechanisms. While showing characteristics of traditional methods of fundraising, there are a range of unanswered questions related to the legal classifications of such products. As ICOs and TGEs will usually be distributed online and internationally, there is usually no single legal framework applying to such transaction, and the legal framework of each market in which the tokens may be offered or sold needs to be considered.
Introduction
Attitude of the country towards ICOs/token sales
We are not aware of any noteworthy discussions on the subject. ICOs or TGEs are not common in Chile.
Legal affairs
Presence of any explicit regulation on ICOs and the issuance of token/coins
There is no specific regulation regarding ICOs or TGEs in Chile.
However, it should be noted that, for the purposes of the Chilean Securities Law, the term securities shall mean any transferable instruments including shares, stock options, bonds, debentures, mutual fund shares, savings plans, negotiable instruments, and, in general, any credit or investment instrument.
Accordingly, though not expressly regulated, should the CMF consider them to be within the term securities, the public offering of coins and/or tokens would be subject to regulations applied by our Securities Laws and regulations to securities offerings.
Presence of any explicit restrictions on ICOs or the issuance, distribution and/or transfer of token/coins
There are no explicit restrictions, save what has been noted above.
Obligations and requirements to issue token/coins
No, there is no regulation. However, should the CMF consider them to be within the scope of the definition of “securities” regulatory requirements may arise.
In case they are characterised as securities, public offerings thereof require that both the issuer and the token/coins may be registered with the CMF. The requirements are extensive in terms of information to be provided to the CMF and the market in general regarding the issuer and its controlling shareholders, as well as the terms and conditions of the issuance. These requirements (legal, financial, and other) are set forth in Securities Law No. 18,045, NCG 30 and other ancillary regulation.
Classification of token/coins in the jurisdiction
Please refer to number ii. and iv. above.
Although no specific classification has been issued so far, there is a high likelihood of token/coins being characterised as securities and thus falling within the regulatory framework applied thereto by the CMF. The question remaining would be, which kind of specific security they would be characterised as, which would depend on the nature of the benefit associated to the titleholder (whether representative of equity, debt or of underlying assets).
Presence of a duty to publish a prospectus bevor offering token/coins to investors
Yes, in the case they are characterised as securities and a public offering thereof is carried out.
For reference, the CMF has drafted several regulations regarding the requirements a prospectus must meet (e.g. NCG 30 and 118 (both as amended) for public stock issuances; NCG 30 (as amended) for bonds and commercial papers; NCG 303 for securitisations (as amended); NCG 352 for stock issued by foreign companies; and N