What does this mean for investors and firms involved in ICOs?

ICOs come in different sizes and forms. They also offer different risk exposures to different business models across different jurisdictions and their legal systems. The rapid development of ICOs and the rapid expansion of cryptocurrency has caused concern amongst policymakers and supervisors. A key driving force for that concern is that much of the activity lies beyond the existing ‘regulatory perimeter’ and thus presently unregulated or open to market participants who may not be fully cognizant of their regulatory obligations.

Baker McKenzie recently issued this client alert, which provides an overview of ESMA’s two short ICO Warning Statements released on 13 November 2017. It discusses how the two statements fit in to the string of supervisory communications of the national supervisory authorities that make up the EU’s European System of Financial Supervision (ESFS). Finally, it considers the impact on cryptocurrency stakeholders and the future of ICOs.

More information on ESMA’s ICO warnings is available on bakermckenzie.com at this link.


Michael Huertas is a counsel in the Banking & Finance practice of Baker McKenzie's Frankfurt office, focusing on helping clients navigate and realize the opportunities in the EU regulatory and supervisory framework. He advises national and international financial institutions, alternative investment funds and non-financial corporates on EU and Eurozone-specific regulatory and supervisory developments.


Sandra Wittinghofer — a member of the Banking and Finance Group — advises national and international banks, trustees and corporations on matters of banking and finance law, particularly on structured finance and relating banking regulatory matters. She advises national and international banks and corporations in matters of finance and regulatory law.


Dr. Manuel Lorenz joined Baker McKenzie in 1999 and currently serves as head of the German Capital Markets Practice Group. He has worked on numerous initial public offerings, tender offers and other corporate and capital markets transactions of listed companies and he advises issuers and market participants on all capital markets and corporate law issues, such as compliance, corporate governance and corporate structuring.