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Finance regulator issues digital coin guidelines

Ryan Morrison

BBC News Online

Jersey's financial services regulator has issued new guidelines for companies wanting to use the island to raise money through digital currency.

There has been a sharp rise in companies using "Initial Coin Offerings" or ICOs to raise money for their business.

Coins
Reuters

An ICO allows a company to issue a digital token, such as Bitcoin, that investors can purchase. That money goes to the company and, if the coin does well, the investor makes money.

It is an alternative to more traditional ways of raising money for a company, such as venture capitalism or stock options.

The Jersey Financial Services Commission (JFSC) has warned investors that ICOs can be volatile. It has made it easier for companies to register an ICO in the island while also ensuring protections are in place to avoid criminal activity.

It has not gone so far as to regulate ICOs, said it would impose minimum standards on the companies issuing them.