(English) ICO, Cryptocurrencies and Blockchain in Italy.

Initial Coin Offering, cryptocurrencies and blockchain in Italy.


ICOs and the evaluation of crytpocurrencies


Initial Coin Offering (ICO) is a form of financing based on the use of cryptocurrencies and blockchain technology.

In essence, whomever intends to implement a certain project, usually related to the creation and development of cryptocurrencies through blockchain technology, aims to obtain public funding in exchange of specific rights and benefits represented by so-called “tokens”.

Such tokens are produced through blockchain technology and confer rights to the holder with regards to the issuer and third parties. Such rights may vary: for example, the right to participate in future dividends, the right to vote in certain subject areas, the right to obtain services or to receive supplied goods from the issuer or third parties, the right to a specific or future payments, ownership or co-ownership rights of a given asset (tangible or intangible).

Such forms of financing have recently had ample development in Italy, however still held back by the uncertainty of the juridical classification of the instruments on which it is based.

One of the most delicate aspects of such matter regards the economic evaluation of cryptocurrencies.

Such evaluation turns out to be essential when, for example, one wants to constitute or increase a company’s share capital through the contribution of cryptocurrencies.

Italy’s Court of First Instance and the Court of Appeal of Brescia has recently addressed such issue.

The facts of the case regard an Italian limited liability company which accepted cryptocurrencies as capital contributions from shareholders. Such capital injections were supported by an expert evaluation confirming the value of such assets and their transfer to the company following the provision of private credentials (so-called “transaction password”) from the transferring shareholder. The instructed notary refused to record the deliberation to increase share capital through cryptocurrencies in the Register of Companies because, given the volatility of such cryptocurrencies, it was not possible to assess the certainty of their value and the effectiveness of the contribution.

The company brought action before the Court of First Instance (CFI) asking that the deliberation be recorded in the Register of Companies.

The Court of Brescia highlights that, according to paragraph 2 of article 2464 of the Civil Code, it is possible to contribute cryptocurrencies to a limited liability company share capital as long as capable of economic assessment as requested for assets other than money.

For the present case, however, the Court rejected the company’s appeal because it was found that the cryptocurrency that had been conferred was not present on any trading platform, whether between cryptocurrencies or between cryptocurrency and legal tender. Consequently, it was therefore impossible to count on reliable price indices deriving from market dynamics.

In fact the only market in which cryptocurrencies operate is an online platform dedicated to the provision of services and goods traceable to the creators of the cryptocurrency itself, making it a self-referential system which is not compatible with the requirements of diffusion and publicity necessary for a virtual currency to be effectively present on the market.

Hence, according to the Court, in spite of the evaluation annexed by the company to the deliberation, in the present case the virtual currency was considered to be in an embryonic stage as it did not have the minimum requisites to be treated as any asset susceptible to a reliable economic evaluation.

The issue was brought before the Court of Appeal of Brescia which confirmed the CFI’s decision rejecting the company’s demands. However, the Court of Appeal gave stricter motivations specifying that there is no easily verifiable stable exchange rate for cryptocurrencies, as for classic currency, therefore making it impossible to attribute a certain and effective value to such virtual currency.


Fiscal Aspects


Recently, the Italian Revenue Agency (Agenzia delle entrate) dealt with the fiscal regime of such instruments (Risposta – 28/09/2018, n. 14).

The case in question concerns a company’s project to emit tokens through an Initial Coin Offering (ICO), in exchange of a payment by means of virtual currency or legal tender (euros or dollars). The tokens purchased would have ascribed the right to benefit from the company’s goods and services (so-called utility tokens). Alternatively, the buyer could have divested the token to third parties, in return for a payment in virtual currency or legal tender.

With regards to the VAT rate, the Revenue Agency has specified that the transfer of tokens in exchange for a payment from the company to private consumers, is not relevant in the application of the VAT rate as it does not constitute an anticipation of the right to a transfer/performance inherent to the token itself. Instead, the transfer of tokens is intended as a mere financial movement which is not relevant for the effects of the VAT rate and therefore, the tax will be chargeable only when the goods will be transferred of the services provided through the spending of the tokens.

In this respect, the European Court of Justice (ruling C-264/14, October 22nd, 2015) clarifies that the abovementioned transfers are exempted from the VAT.


Provisions Anti-Money Laundering

Another relevant aspect concerns the observation of anti-money laundering provisions on the traceability of payments and the limitation of the use of cash in reference to the use of cryptocurrencies.

In regard, the Italian Notary has recently specified, in a legal opinion (Quesito Antiriciclaggio n. 3-2018/B), how cryptocurrency transactions are traceable in a digital way through an unalterable database (blockchain) and authentication credentials. However, this system cannot guarantee the physical identity of the subject accessing it, as it is uniquely programmed to enable certain functions whenever the user is equipped with correct access information (pins, codes, etc.).

This uncertainty may result in a contrast with the provisions concerning limits of the use of cash, limits above which all transactions are traceable through the channeling of financial flows in banks, payment institutions and virtual currency institutions.

According to the Notary, there would be difficulties in specifying the utilized methods of payment because the indication of the public keys combined to the cryptocurrencies does not allow the identification of the virtual wallet holder. Furthermore, the indication of the private keys associated to the public ones is unfeasible as it would disclose the necessary instrument to dispose of the virtual currency.

Given the impossibility to fulfill the anti-money laundering obligations, the Italian Notary suggest the possibility of reporting any suspicious transaction when cryptocurrencies are utilized as payment methods.



It is therefore fundamental to further elaborate and study the legal issues arising from the use of cryptocurrencies.

Such abovementioned matters do not only relate to Italian legislation. The traceability requirements and the identification of the effective holder of an economic and financial transaction are in almost every national legislation regarding anti-money laundering. In fact, often, cryptocurrency transactions or operations based on blockchain technology are transnational and therefore must be verified based on single national legislations.

The legal evaluation of such matters must also be extended to the compliance of legislation on the protection of personal data and the security of information.

Accordingly, in ICOs and in the use of cryptocurrencies and blockchain technology it is important that the legal evaluation accompanying the project is compiled from transnational point of view.

Precisely because of this, Jurisglobal – International Law Firms, thanks to the legal experience of its lawyers and consultants with venues across the globe, has developed a cross-sectoral approach to legal issues regarding blockchain technology such as the identification of compliance problems with other legislations; the development and integration of a global strategy in relation to the application of blockchains and with the support of regulations on the protection of technological risks and the protection of personal data (EU Regulation 2016/679 GDPR, Privacy Shield, etc.).


William Di Cicco – Lawyer in Rome Studio Legale Villa Isoldi & Associati  member of Jurisglobal[:]



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