For the Italian Supreme Court docket, cryptocurrencies are monetary merchandise | Hogan Lovells

On 22 November 2022, the Italian Supreme Court docket, Legal Part No. II issued a judgment involving a platform which issued an preliminary coin providing (ICO) on the idea of a whitepaper with the aim of making a decentralized platform of peer-to-peer logistics providers. Specifically, the customers contributed Bitcoins to obtain from the platform a sure variety of tokens supposed to permit using the providers supplied by the platform itself.

In brief, the Supreme Court docket indicated that crypto-assets having sure particular options, specifically:

• requiring the cost of funds by the investor;

• entailing an expectation of a monetary return; and

• entailing a danger immediately related to the quantity of funds invested

fall inside the broad home class of economic merchandise. Within the case at hand, the customers (i) invested capital (ii) as a way to get hold of a monetary return, consisting of the distinction between the cryptocurrencies values relying on the time of buy and due to this fact (iii) assumed a danger per se associated to using the invested funds.

In reaching this choice, the Supreme Court docket did, not nonetheless, (i)  analyse the whitepaper of the venture, (ii) keep in mind the CONSOB orientation pursuant to which the mere worth appreciation over time doesn’t per se entail a classification of a cryptocurrency as funding product and (ii) present clear definitions because the judgement contained plenty of definitional uncertainties, such because the classification of digital foreign money as a monetary product.

Conclusion

Crypto-asset service suppliers should fastidiously analyse the kind of exercise performed in Italy because the mere provide of crypto-assets might be interpreted by native courts as efficiency of funding providers. On this regard, the European authorized framework on crypto-assets is awaited because it might additionally make clear these points.