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

Summary

This is JFSC guidance setting out the application process and ongoing requirements for issuers of initial coin and token offerings (IC/TOs) in Jersey. It updates earlier guidance to distinguish issuance of virtual assets from tokenisation of real world assets (now covered separately), and clarifies the conditions the JFSC attaches to consent granted under the Control of Borrowing (Jersey) Order 1958 (COBO).

• Incorporation: The issuer must be incorporated as a Jersey company or Jersey LLC, with its registered office provided by its appointed trust company business (TCB).
• COBO consent: The issuer must obtain JFSC consent under COBO before undertaking any activity, and must seek prior JFSC consent for any material change to matters in its original proposal.
• AML/CFT/CPF measures: The issuer must apply enhanced AML/CFT/CPF checks (identity, source of funds/wealth) to purchasers and redeemers of tokens, and must not issue or buy back tokens where checks are unsatisfactory.
• TCB and resident director: The issuer must appoint and maintain a JFSC-licensed TCB and a Jersey-resident director who is a natural person and principal person of that TCB; prior JFSC approval is needed to change the TCB, director or counterparties.
• Retail investor protection: The issuer must have procedures to mitigate inappropriate retail investment and require purchasers to actively confirm they understand a prescribed risk warning before buying tokens.
• Disclosure documents: The issuer must prepare and submit an information memorandum (which may be a white paper) meeting prospectus-like content requirements, and ensure all marketing material is clear, fair and not misleading.
• Audited accounts: The issuer must 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.
• VASP registration: The issuer must consider whether its activities meet the FATF/Proceeds of Crime Law definition of a virtual asset service provider (VASP), which would trigger separate registration and supervision obligations.

The guidance applies only to issuance of virtual assets, not tokenised real world assets, and only governs conditions attached to the COBO consent; issuers must separately consider other applicable Jersey laws (e.g. Financial Services (Jersey) Law 1998, Proceeds of Crime legislation). The JFSC reserves the right to impose additional or bespoke conditions and to review this guidance periodically.

Key obligations

• Incorporate as a Jersey company or Jersey LLC with registered office provided by the appointed TCB
• Obtain JFSC consent under the Control of Borrowing (Jersey) Order 1958 before undertaking any IC/TO activity
• Seek prior JFSC consent for any material change to the matters set out in the original COBO consent proposal
• Apply enhanced AML/CFT/CPF customer due diligence (identity and, where risk warrants, source of funds/wealth) to purchasers and redeemers of tokens/coins
• Refuse to issue or repurchase tokens/coins where AML/CFT/CPF checks are not satisfactorily completed
• Appoint and at all times maintain a JFSC-licensed TCB to administer the issuer
• Appoint and maintain a Jersey-resident director on the governing body who is a natural person and a principal person of the appointed TCB
• Obtain prior JFSC approval before changing the TCB, the Jersey-resident director, or specified counterparties
• Establish a process requiring purchasers to actively confirm understanding and acceptance of the prescribed risk warning before purchase
• Prepare and submit to the JFSC an information memorandum (which may be a white paper) meeting prospectus-equivalent content requirements
• Ensure all marketing material, including the information memorandum, is 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 approval before any change of counterparties of the issuer
• Consider whether the issuer's activities meet the definition of a VASP and register accordingly if so

Applies to

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