The application process for issuers of initial coin and token offerings (IC/TOs)

Summary

This is JFSC guidance describing how issuers of initial coin and token offerings (IC/TOs) obtain and comply with the consent needed to raise capital in or from Jersey. It replaces the 2018 guidance, clarifies the Control of Borrowing (Jersey) Order 1958 (COBO) consent process, and separates virtual asset issuances from tokenised real world asset offerings (which are covered by a separate guidance note).

The guidance applies to any person or entity proposing to issue coins or tokens (security or non security) through a Jersey vehicle. It sets out general requirements that apply to all IC/TO issuers and further, more detailed conditions attached to the COBO consent itself.

• Incorporation: Issuer must be incorporated as a Jersey company or Jersey LLC, with its registered office provided by an appointed trust company business (TCB).
• COBO consent: Issuer must obtain JFSC consent under the Control of Borrowing (Jersey) Order 1958 before undertaking any activity, supported by a legal analysis (the proposal) covering the offering's structure, use of proceeds, service providers, and wind down arrangements.
• VASP registration: Issuer must consider whether it meets the FATF/Proceeds of Crime Law definition of a virtual asset service provider (VASP) and register accordingly if so.
• AML/CFT/CPF controls: Issuer must apply enhanced AML/CFT/CPF customer take on, profiling, source of funds/wealth verification, and transaction monitoring to purchasers and redeemers of the tokens/coins.
• TCB and resident director: Issuer must appoint and maintain a JFSC-licensed TCB and a Jersey resident director who is also a principal person of that TCB; any change requires prior JFSC approval.
• Retail investor protection: Issuer must implement processes so retail investors actively confirm understanding of a prescribed risk warning before purchasing, and must otherwise mitigate inappropriate retail participation.
• Disclosure: Issuer must prepare and submit an information memorandum or white paper meeting prospectus like content requirements, and ensure all marketing material is clear, fair and not misleading.
• Audited accounts: Issuer must have annual accounts audited and filed with the Jersey Companies Registry under the Companies (Jersey) Law 1991 or LLC Regulations 2022.
• Counterparty changes: No change of counterparties, TCB, or resident director without prior JFSC approval.

These conditions are imposed through the COBO consent itself rather than direct JFSC supervision, unless the issuer's activities bring it within the VASP regime. The JFSC reserves the right to impose additional or case by case conditions, particularly relaxing requirements for non security tokens.

Key obligations

• Obtain JFSC consent under the Control of Borrowing (Jersey) Order 1958 before undertaking any IC/TO activity in or from Jersey.
• Incorporate as a Jersey company or Jersey LLC with a registered office provided by an appointed TCB.
• Assess whether the issuer's activities meet the VASP definition under the Proceeds of Crime Law and register under the Proceeds of Crime (Supervisory Bodies) (Jersey) Law 2008 if applicable.
• Appoint and maintain a JFSC-licensed trust company business (TCB) to administer the issuer.
• Appoint and maintain a Jersey-resident natural person director who is also a principal person of the appointed TCB.
• Obtain prior JFSC approval before changing the TCB, the Jersey-resident director, or specified counterparties set out in the COBO consent.
• Apply enhanced AML/CFT/CPF customer due diligence, including identity and source of funds/wealth verification, to purchasers and redeemers of tokens/coins, and refuse issuance/purchase where checks are unsatisfactory.
• Establish a process requiring purchasers to actively confirm they have read and understood the prescribed risk warning before completing a token/coin purchase.
• Prepare and submit to the JFSC an information memorandum or white paper meeting prospectus-equivalent content requirements.
• Ensure all marketing materials, including the information memorandum, are clear, fair and not misleading.
• Have annual accounts audited and filed with the Jersey Companies Registry under the Companies (Jersey) Law 1991 or the Limited Liability Companies (General Provisions) (Jersey) Regulations 2022.
• Obtain prior JFSC consent before making any material change to matters contained in the original COBO consent proposal.

Applies to

IC/TO issuers, virtual asset service providers (VASPs), trust company businesses (TCBs) / trust company service providers (TCSPs), Jersey companies and Jersey limited liability companies, authorised participants, regulated asset managers