Initial Coin Offerings and EU Prospectus Disclosure

There is a growing consensus among regulators and commentators that some crypto currencies (so-called ‘investment tokens’) are securities, provided that they grant their owner rights that are comparable to those of an investor. as a consequence, EU initial disclosure regulation applies, requiring the issuer to draw up a prospectus that con tains all the information relevant for an investor to make an informed decision. Issu ers of investment tokens are also subject to prospectus liability if the prospectus is flawed or no prospectus was made available at all. however, this conclusion is only the first step of the wider debate of the best regulation of investment tokens, and many questions remain. the elephant in the room is whether the current regulation can be sensibly applied to public offers of investment tokens. this article discusses open questions in this regard, such as which national regulator is responsible for prospectus review and administrative measures? how can issuers from outside the EU ensure they do not become subject to the EU initial dis closure obligations? Who would the ‘issuer’ be if the tokens were offered by a decen tralised network? the article concludes that EU initial disclosure regulation can be sensibly applied to initial coin offerings. however, the fact that supervision and enforcement are cur rently carried out on the national level poses serious problems that should be addressed in the future.