Consob’s first move against cryptocurrencies, an English ICO has been blocked

Consob, the authority that regulates the Italian financial markets, has blocked an ICO.

The ICO was launched by Togacoin Ltd, a company incorporated under English law created to finance a data centre in Tenerife, cryptocurrency mining, hosting and resale of electricity.  

The Italian Consob intervened because the website and the whitepaper were also in Italian, so the token offered is in effect an investment “aimed at the Italian public“.

The offer promised a precise and significant return: 100 dollars invested would become 213 in one year, 434 in two and 654 in three.

Consob intervened because it considered the ICO as an abusive financial offer, with resolution 20660 of October 31st, 2018 with which ordered the suspension of the token sale: “the offer to the Italian public concerning investments of a financial nature made by Togacoin LTD through the website https://togacoin.com, was suspended as a precautionary measure, for a period of ninety days“.

The reason for the suspension of the ICO was given in the text of the resolution:

“CONSIDERING art. 94, paragraph 1, of Legislative Decree no. 58/1998, pursuant to which “Those who intend to make an offer to the public shall publish a prospectus in advance. To this end, for offers concerning Community financial instruments in which Italy is the home Member State and for offers concerning financial products other than Community financial instruments, they shall give prior notice to Consob, attaching the prospectus intended for publication. The prospectus may not be published until it has been approved by Consob”; NOTING that in relation to the activity carried out by Togacoin LTD, no prior notification to Consob has been made and no prospectus for publication has been sent“.

According to what was reported today in the Italian newspaper Sole 24 Ore in an article signed by Stefano Capaccioli and Pierangelo Soldavini,

“the analysis of Consob appears interesting and well motivated, unlike that of the ‘Agenzia delle Entrate’ (Italian IRS) in ruling 14/2018, in which no substantial analysis is made on the characteristics of the token which, in this case, is similar to a financial instrument referred to in letter c) of Article. 67 of the Tuir“.