The tokenization of assets provides for an increasing merger of traditional and crypto-financial instruments. At the same time, security token offerings (STOs) pose new challenges for regulators worldwide: Which tokens require which regulation? When is a security talk, when is a token an asset?
The Federal Financial Supervisory Authority BaFin has addressed this issue in a specialist article. In it, the agency notes a “paradigm shift” as a result of the tokenization of assets in the form of security tokens.
What is an investment?
The Investment Act, to which BaFin refers in the article, defines an investment as
- Shares which grant a participation in the result of a company
- Shares in a property that the issuer or a third party owns or manages in its own name for foreign account (trust assets)
- Partial loans (equity loans)
- Subordinated loan
- Participation rights
- Registered Notes
- Other investments providing or promising cash settlement in exchange for temporary lending of interest and repayment or assets