{"id":11633,"date":"2024-12-18T13:32:31","date_gmt":"2024-12-18T13:32:31","guid":{"rendered":"https:\/\/www.marketing-faktor.de\/ico-bafin\/"},"modified":"2025-12-11T09:58:19","modified_gmt":"2025-12-11T09:58:19","slug":"ico-bafin","status":"publish","type":"blog_posts","link":"https:\/\/www.marketing-faktor.de\/en\/ico-bafin\/","title":{"rendered":"ICO BaFin: Current regulation of initial coin offerings and security token offerings"},"content":{"rendered":"<section class=\"wpb-content-wrapper\"><p>[vc_row][vc_column][vc_column_text]<\/p>\n<h1 style=\"text-align: center;\"><span id=\"ICO_BaFin_Current_Regulation_of_Initial_Coin_Offerings_and_Security_Token_Offerings\"><strong>ICO BaFin: Current Regulation of Initial Coin Offerings and Security Token Offerings<\/strong><\/span><\/h1>\n<p>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column width=&#8221;1\/2&#8243;][vc_single_image image=&#8221;13214&#8243; img_size=&#8221;full&#8221; css=&#8221;.vc_custom_1761765378827{padding-right: 20px !important;}&#8221;][\/vc_column][vc_column width=&#8221;1\/2&#8243;][vc_column_text css=&#8221;.vc_custom_1734528501757{padding-top: 20px !important;padding-right: 20px !important;padding-bottom: 20px !important;padding-left: 30px !important;}&#8221;]<span style=\"font-weight: 400;\">Rethinking capital raising: <\/span><b>Initial Coin Offerings (ICOs)<\/b><span style=\"font-weight: 400;\"> and <\/span><b>Security Token Offerings (STOs)<\/b><span style=\"font-weight: 400;\"> have turned traditional financing models upside down. Innovative, digital, and global \u2013 these methods are transforming how companies raise money for their projects. But it\u2019s not a free-for-all in Germany. The <\/span><b>Federal Financial Supervisory Authority (BaFin)<\/b><span style=\"font-weight: 400;\"> has set clear rules designed to protect investors and steer the market. How does that work in practice? What opportunities arise \u2013 and where are the obstacles? Here you\u2019ll learn what you need to know about the <\/span><b>current regulation<\/b><span style=\"font-weight: 400;\"> of ICOs and STOs in Germany.<\/span>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]<div id=\"toc_container\" class=\"no_bullets\"><p class=\"toc_title\">Inhaltsverzeichnis<\/p><ul class=\"toc_list\"><li><a href=\"#ICO_BaFin_Current_Regulation_of_Initial_Coin_Offerings_and_Security_Token_Offerings\"><span class=\"toc_number toc_depth_1\">1<\/span> ICO BaFin: Current Regulation of Initial Coin Offerings and Security Token Offerings<\/a><ul><li><a href=\"#What_are_ICOs_Initial_Coin_Offerings_and_STOs_Security_Token_Offerings\"><span class=\"toc_number toc_depth_2\">1.1<\/span> What are ICOs (Initial Coin Offerings) and STOs (Security Token Offerings)?<\/a><\/li><li><a href=\"#What_role_does_BaFin_play_in_ICOs_and_STOs\"><span class=\"toc_number toc_depth_2\">1.2<\/span> What role does BaFin play in ICOs and STOs?<\/a><ul><li><a href=\"#Legal_classification_of_Initial_Coin_Offerings_by_BaFin\"><span class=\"toc_number toc_depth_3\">1.2.1<\/span> Legal classification of Initial Coin Offerings by BaFin<\/a><\/li><li><a href=\"#Requirements_for_issuers\"><span class=\"toc_number toc_depth_3\">1.2.2<\/span> Requirements for issuers<\/a><\/li><li><a href=\"#Combating_money_laundering\"><span class=\"toc_number toc_depth_3\">1.2.3<\/span> Combating money laundering<\/a><\/li><li><a href=\"#Advantages_of_regulation\"><span class=\"toc_number toc_depth_3\">1.2.4<\/span> Advantages of regulation<\/a><\/li><li><a href=\"#Investor_protection\"><span class=\"toc_number toc_depth_3\">1.2.5<\/span> Investor protection<\/a><\/li><li><a href=\"#Promoting_market_acceptance\"><span class=\"toc_number toc_depth_3\">1.2.6<\/span> Promoting market acceptance<\/a><\/li><li><a href=\"#Encouraging_innovation\"><span class=\"toc_number toc_depth_3\">1.2.7<\/span> Encouraging innovation<\/a><\/li><\/ul><\/li><li><a href=\"#What_challenges_arise_from_BaFin_regulation\"><span class=\"toc_number toc_depth_2\">1.3<\/span> What challenges arise from BaFin regulation?<\/a><ul><li><a href=\"#High_costs\"><span class=\"toc_number toc_depth_3\">1.3.1<\/span> High costs<\/a><\/li><li><a href=\"#Complexity\"><span class=\"toc_number toc_depth_3\">1.3.2<\/span> Complexity<\/a><\/li><li><a href=\"#International_competition\"><span class=\"toc_number toc_depth_3\">1.3.3<\/span> International competition<\/a><\/li><li><a href=\"#Examples_from_practice\"><span class=\"toc_number toc_depth_3\">1.3.4<\/span> Examples from practice<\/a><\/li><\/ul><\/li><li><a href=\"#The_future_of_ICO_and_STO_regulation_in_Germany\"><span class=\"toc_number toc_depth_2\">1.4<\/span> The future of ICO and STO regulation in Germany<\/a><ul><li><a href=\"#European_harmonization\"><span class=\"toc_number toc_depth_3\">1.4.1<\/span> European harmonization<\/a><\/li><li><a href=\"#Technological_developments\"><span class=\"toc_number toc_depth_3\">1.4.2<\/span> Technological developments<\/a><\/li><li><a href=\"#Supporting_start-ups\"><span class=\"toc_number toc_depth_3\">1.4.3<\/span> Supporting start-ups<\/a><\/li><\/ul><\/li><li><a href=\"#In_closing\"><span class=\"toc_number toc_depth_2\">1.5<\/span> In closing<\/a><\/li><li><a href=\"#More_articles\"><span class=\"toc_number toc_depth_2\">1.6<\/span> More articles<\/a><ul><li><ul><li><a href=\"#Bewerten_Sie_unseren_Artikel\"><span class=\"toc_number toc_depth_4\">1.6.0.1<\/span> Bewerten Sie unseren Artikel<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/div>\n[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]<\/p>\n<h2 style=\"text-align: center;\"><span id=\"What_are_ICOs_Initial_Coin_Offerings_and_STOs_Security_Token_Offerings\"><strong>What are ICOs (Initial Coin Offerings) and STOs (Security Token Offerings)?<\/strong><\/span><\/h2>\n<p>[\/vc_column_text][vc_separator color=&#8221;juicy_pink&#8221; border_width=&#8221;5&#8243; el_width=&#8221;10&#8243;][vc_column_text]<b>ICOs (Initial Coin Offerings)<\/b><span style=\"font-weight: 400;\"> are a method of <\/span><b><a class=\"wpil_keyword_link\" title=\"Kapitalbeschaffung\" href=\"https:\/\/www.marketing-faktor.de\/ico-fundraising\/\" data-wpil-keyword-link=\"linked\" data-wpil-monitor-id=\"1710\">capital raising<\/a><\/b><span style=\"font-weight: 400;\"> in which companies sell digital tokens to investors, usually in exchange for <\/span><b>cryptocurrencies<\/b><span style=\"font-weight: 400;\"> such as Bitcoin or Ethereum. Within a project or ecosystem, these tokens often serve a <\/span><b>specific purpose<\/b><span style=\"font-weight: 400;\"> \u2013 for example, as a means of payment or an access key to a platform. A well-known example is Ethereum itself, which laid the foundation for its worldwide acceptance through an ICO in 2014. <\/span><b>Important to know<\/b><span style=\"font-weight: 400;\">: ICO tokens are generally not securities but so-called utility tokens, which resemble a voucher or usage ticket.<\/span><\/p>\n<p><b>STOs (Security Token Offerings)<\/b><span style=\"font-weight: 400;\"> take a decisive step further and are, from a legal perspective, <\/span><b>securities offerings<\/b><span style=\"font-weight: 400;\">. The security tokens issued represent shares in a company, rights to future profits, or interest payments. They give investors a <\/span><b>legally secured position<\/b><span style=\"font-weight: 400;\"> similar to traditional stocks or bonds. A prominent example is Bitbond\u2019s STO campaign in 2019, which allowed investors to participate in a <\/span><b>tokenized lending fund<\/b><span style=\"font-weight: 400;\">. Because of their financial nature, STOs are subject to the <\/span><b>strict requirements of securities law<\/b><span style=\"font-weight: 400;\">, making them more regulated and often more attractive to institutional investors.<\/span>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]<\/p>\n<h2 style=\"text-align: center;\"><span id=\"What_role_does_BaFin_play_in_ICOs_and_STOs\"><strong>What role does BaFin play in ICOs and STOs?<\/strong><\/span><\/h2>\n<p>&nbsp;<\/p>\n<div id=\"gtx-trans\" style=\"position: absolute; left: 297px; top: 49px;\">\n<div class=\"gtx-trans-icon\"><\/div>\n<p>&nbsp;<\/p>\n<\/div>\n<p>[\/vc_column_text][vc_separator color=&#8221;juicy_pink&#8221; border_width=&#8221;5&#8243; el_width=&#8221;10&#8243;][vc_column_text]<span style=\"font-weight: 400;\">BaFin has a central task: it supervises the <\/span><b>financial market in Germany<\/b><span style=\"font-weight: 400;\">, protects investors, and ensures stable market integrity. Especially with ICOs and STOs it plays a <\/span><b>key role<\/b><span style=\"font-weight: 400;\"> because it defines the <\/span><b>legal framework<\/b><span style=\"font-weight: 400;\"> and sets clear standards. Without this regulation, the market would quickly lose confidence.<\/span>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]<\/p>\n<h3 style=\"text-align: center;\"><span id=\"Legal_classification_of_Initial_Coin_Offerings_by_BaFin\"><strong>Legal classification of Initial Coin Offerings by BaFin<\/strong><\/span><\/h3>\n<p>&nbsp;<\/p>\n<div id=\"gtx-trans\" style=\"position: absolute; left: 227px; top: 77px;\">\n<div class=\"gtx-trans-icon\"><\/div>\n<p>&nbsp;<\/p>\n<\/div>\n<p>[\/vc_column_text][vc_separator color=&#8221;juicy_pink&#8221; border_width=&#8221;5&#8243; el_width=&#8221;10&#8243;][vc_column_text]<span style=\"font-weight: 400;\">Whether a token qualifies as a <\/span><b>financial instrument<\/b><span style=\"font-weight: 400;\"> is determined by BaFin on a case-by-case basis. It looks closely at the token\u2019s structure and function. Utility tokens that merely grant access to <\/span><b>services or products<\/b><span style=\"font-weight: 400;\"> generally fall outside the scope of the <\/span><b>Securities Trading Act<\/b><span style=\"font-weight: 400;\">. The picture is very different for security tokens, where the <\/span><b>Securities Prospectus Act (WpPG)<\/b><span style=\"font-weight: 400;\"> applies, requiring the preparation of a comprehensive prospectus. This document must provide investors with all essential information so they can make informed decisions.<\/span>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]<\/p>\n<h3 style=\"text-align: center;\"><span id=\"Requirements_for_issuers\"><strong>Requirements for issuers<\/strong><\/span><\/h3>\n<p>[\/vc_column_text][vc_separator color=&#8221;juicy_pink&#8221; border_width=&#8221;5&#8243; el_width=&#8221;10&#8243;][vc_column_text]<span style=\"font-weight: 400;\">The requirements vary depending on the type of token offering. ICOs are subject to <\/span><b>less stringent rules<\/b><span style=\"font-weight: 400;\"> but must still provide clear and understandable information. Issuers are obliged to inform potential buyers about the <\/span><b>risks and functions<\/b><span style=\"font-weight: 400;\"> of the tokens. For STOs the bar is much higher: an approved prospectus is mandatory, as is compliance with the <\/span><b>MiFID II directives<\/b><span style=\"font-weight: 400;\"> (Markets in Financial Instruments Directive). These requirements create transparency but also increase the workload for companies.<\/span>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]<\/p>\n<h3 style=\"text-align: center;\"><span id=\"Combating_money_laundering\"><strong>Combating money laundering<\/strong><\/span><\/h3>\n<p>[\/vc_column_text][vc_separator color=&#8221;juicy_pink&#8221; border_width=&#8221;5&#8243; el_width=&#8221;10&#8243;][vc_column_text]<span style=\"font-weight: 400;\">Another focus is on the <\/span><b>prevention of money laundering<\/b><span style=\"font-weight: 400;\">. BaFin requires issuers to implement measures for <\/span><b>investor identification<\/b><span style=\"font-weight: 400;\"> and <\/span><b>transaction tracing<\/b><span style=\"font-weight: 400;\">. This ensures that platforms are not used for <\/span><b>illegal activities<\/b><span style=\"font-weight: 400;\">. These requirements make the market safer but also pose technical and organizational challenges for providers.<\/span>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]<\/p>\n<h3 style=\"text-align: center;\"><span id=\"Advantages_of_regulation\"><strong>Advantages of regulation<\/strong><\/span><\/h3>\n<p>[\/vc_column_text][vc_separator color=&#8221;juicy_pink&#8221; border_width=&#8221;5&#8243; el_width=&#8221;10&#8243;][vc_column_text]<span style=\"font-weight: 400;\">Clear regulation by BaFin offers numerous advantages. It creates <\/span><b>legal certainty<\/b><span style=\"font-weight: 400;\"> for all parties involved and strengthens <\/span><b>trust<\/b><span style=\"font-weight: 400;\"> in these new financing instruments. Companies know what they are getting into, and investors feel better protected. Overall, the market becomes more <\/span><b>attractive and stable<\/b><span style=\"font-weight: 400;\">.<\/span>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]<\/p>\n<h3 style=\"text-align: center;\"><span id=\"Investor_protection\"><strong>Investor protection<\/strong><\/span><\/h3>\n<p>[\/vc_column_text][vc_separator color=&#8221;juicy_pink&#8221; border_width=&#8221;5&#8243; el_width=&#8221;10&#8243;][vc_column_text]<span style=\"font-weight: 400;\">In the past, there were several cases of <\/span><b>fraud<\/b><span style=\"font-weight: 400;\"> in the ICO sector that unsettled investors. Thanks to BaFin, such cases are increasingly a thing of the past. <\/span><b>Clear guidelines<\/b><span style=\"font-weight: 400;\"> and <\/span><b>transparency obligations<\/b><span style=\"font-weight: 400;\"> make it difficult for dubious providers to gain a foothold, while investors can make more informed decisions.<\/span>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]<\/p>\n<h3 style=\"text-align: center;\"><span id=\"Promoting_market_acceptance\"><strong>Promoting market acceptance<\/strong><\/span><\/h3>\n<p>[\/vc_column_text][vc_separator color=&#8221;juicy_pink&#8221; border_width=&#8221;5&#8243; el_width=&#8221;10&#8243;][vc_column_text]<span style=\"font-weight: 400;\">Institutional investors often hesitate when markets are <\/span><b>unregulated<\/b><span style=\"font-weight: 400;\">. A clear legal basis from BaFin therefore significantly increases the acceptance of ICOs and STOs. Investors appreciate the <\/span><b>additional security<\/b><span style=\"font-weight: 400;\"> and see regulated products as more attractive. The blockchain ecosystem benefits in the long term from this improved market acceptance.<\/span>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]<\/p>\n<h3 style=\"text-align: center;\"><span id=\"Encouraging_innovation\"><strong>Encouraging innovation<\/strong><\/span><\/h3>\n<p>[\/vc_column_text][vc_separator color=&#8221;juicy_pink&#8221; border_width=&#8221;5&#8243; el_width=&#8221;10&#8243;][vc_column_text]<span style=\"font-weight: 400;\">With the right balance between regulation and freedom, Germany could become a leading location for blockchain innovation. A <\/span><b>clear legal framework<\/b><span style=\"font-weight: 400;\"> enables companies to implement new projects safely and efficiently while signaling <\/span><b>stability and reliability<\/b><span style=\"font-weight: 400;\"> to investors \u2013 a win-win for the market and the economy.<\/span>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]<\/p>\n<h2 style=\"text-align: center;\"><span id=\"What_challenges_arise_from_BaFin_regulation\"><strong>What challenges arise from BaFin regulation?<\/strong><\/span><\/h2>\n<p>[\/vc_column_text][vc_separator color=&#8221;juicy_pink&#8221; border_width=&#8221;5&#8243; el_width=&#8221;10&#8243;][vc_column_text]<span style=\"font-weight: 400;\">BaFin regulation undoubtedly offers many advantages but also brings <\/span><b>challenges<\/b><span style=\"font-weight: 400;\"> that companies must overcome. Smaller firms and start-ups in particular face significant <\/span><b>hurdles<\/b><span style=\"font-weight: 400;\">, as the requirements can be <\/span><b>time-consuming and costly<\/b><span style=\"font-weight: 400;\">. Finding the balance between innovative entrepreneurship and regulatory compliance is no easy task.<\/span>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]<\/p>\n<h3 style=\"text-align: center;\"><span id=\"High_costs\"><strong>High costs<\/strong><\/span><\/h3>\n<p>[\/vc_column_text][vc_separator color=&#8221;juicy_pink&#8221; border_width=&#8221;5&#8243; el_width=&#8221;10&#8243;][vc_column_text]<span style=\"font-weight: 400;\">Complying with regulatory requirements is <\/span><b>expensive<\/b><span style=\"font-weight: 400;\">. Drafting a securities prospectus alone can swallow up a high five-figure sum. This burden hits start-ups particularly hard, as they often operate with <\/span><b>limited capital<\/b><span style=\"font-weight: 400;\">. For some, this is a reason not to launch an STO at all.<\/span>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]<\/p>\n<h3 style=\"text-align: center;\"><span id=\"Complexity\"><strong>Complexity<\/strong><\/span><\/h3>\n<p>[\/vc_column_text][vc_separator color=&#8221;juicy_pink&#8221; border_width=&#8221;5&#8243; el_width=&#8221;10&#8243;][vc_column_text]<span style=\"font-weight: 400;\">The legal classification of a token is rarely clear-cut. Companies must determine whether they meet BaFin\u2019s requirements, which is hardly feasible without <\/span><b>external advisors<\/b><span style=\"font-weight: 400;\">. This effort complicates the process and often delays market launch.<\/span>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]<\/p>\n<h3 style=\"text-align: center;\"><span id=\"International_competition\"><strong>International competition<\/strong><\/span><\/h3>\n<p>[\/vc_column_text][vc_separator color=&#8221;juicy_pink&#8221; border_width=&#8221;5&#8243; el_width=&#8221;10&#8243;][vc_column_text]<b>Strict regulations<\/b><span style=\"font-weight: 400;\"> make Germany less attractive, while countries like Switzerland or Singapore score with <\/span><b>simpler requirements<\/b><span style=\"font-weight: 400;\">. Companies and investors might therefore migrate, which could weaken Germany\u2019s position as an innovation hub in the long run.<\/span>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]<\/p>\n<h3 style=\"text-align: center;\"><span id=\"Examples_from_practice\"><strong>Examples from practice<\/strong><\/span><\/h3>\n<p>&nbsp;<\/p>\n<div id=\"gtx-trans\" style=\"position: absolute; left: 254px; top: 49px;\">\n<div class=\"gtx-trans-icon\"><\/div>\n<p>&nbsp;<\/p>\n<\/div>\n<p>[\/vc_column_text][vc_separator color=&#8221;juicy_pink&#8221; border_width=&#8221;5&#8243; el_width=&#8221;10&#8243;][vc_column_text]<span style=\"font-weight: 400;\">Several German companies have successfully carried out ICOs and STOs. A well-known example is the Neufund platform, which specialises in STOs and offers investors access to <\/span><b>tokenized securities<\/b><span style=\"font-weight: 400;\">. These projects show that BaFin regulation can be <\/span><b>not an obstacle<\/b><span style=\"font-weight: 400;\"> but an <\/span><b>opportunity<\/b><span style=\"font-weight: 400;\"> when used correctly.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Another example is Bitbond GmbH, which conducted Germany\u2019s first <\/span><b>fully regulated STO<\/b><span style=\"font-weight: 400;\"> in 2019. This case underscores that it is possible to meet BaFin\u2019s requirements while addressing investors worldwide.<\/span>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]<\/p>\n<h2 style=\"text-align: center;\"><span id=\"The_future_of_ICO_and_STO_regulation_in_Germany\"><strong>The future of ICO and STO regulation in Germany<\/strong><\/span><\/h2>\n<p>&nbsp;<\/p>\n<div id=\"gtx-trans\" style=\"position: absolute; left: 218px; top: 49px;\">\n<div class=\"gtx-trans-icon\"><\/div>\n<p>&nbsp;<\/p>\n<\/div>\n<p>[\/vc_column_text][vc_separator color=&#8221;juicy_pink&#8221; border_width=&#8221;5&#8243; el_width=&#8221;10&#8243;][vc_column_text]<span style=\"font-weight: 400;\">The regulation of ICOs and STOs remains a dynamic topic. New technologies and market requirements call for <\/span><b>continuous adjustments to the regulations<\/b><span style=\"font-weight: 400;\">.<\/span>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]<\/p>\n<h3 style=\"text-align: center;\"><span id=\"European_harmonization\"><strong>European harmonization<\/strong><\/span><\/h3>\n<p>[\/vc_column_text][vc_separator color=&#8221;juicy_pink&#8221; border_width=&#8221;5&#8243; el_width=&#8221;10&#8243;][vc_column_text]<span style=\"font-weight: 400;\">At EU level, work is underway on a <\/span><b>uniform regulation<\/b><span style=\"font-weight: 400;\"> of cryptocurrencies and tokens, the so-called <\/span><b>MiCA regulation <\/b><span style=\"font-weight: 400;\">(Markets in Crypto-Assets). This could supplement or replace existing national rules, bringing greater consistency across the EU.<\/span>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]<\/p>\n<h3 style=\"text-align: center;\"><span id=\"Technological_developments\"><strong>Technological developments<\/strong><\/span><\/h3>\n<p>&nbsp;<\/p>\n<div id=\"gtx-trans\" style=\"position: absolute; left: 277px; top: 49px;\">\n<div class=\"gtx-trans-icon\"><\/div>\n<p>&nbsp;<\/p>\n<\/div>\n<p>[\/vc_column_text][vc_separator color=&#8221;juicy_pink&#8221; border_width=&#8221;5&#8243; el_width=&#8221;10&#8243;][vc_column_text]<span style=\"font-weight: 400;\">Blockchain technologies are evolving rapidly. In the future, BaFin will have to address new types of tokens such as NFTs (Non-Fungible Tokens) and DeFi (Decentralized Finance). This could once again present <\/span><b>challenges<\/b><span style=\"font-weight: 400;\"> for <\/span><b>regulation<\/b><span style=\"font-weight: 400;\">.<\/span>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]<\/p>\n<h3 style=\"text-align: center;\"><span id=\"Supporting_start-ups\"><strong>Supporting start-ups<\/strong><\/span><\/h3>\n<p>[\/vc_column_text][vc_separator color=&#8221;juicy_pink&#8221; border_width=&#8221;5&#8243; el_width=&#8221;10&#8243;][vc_column_text]<span style=\"font-weight: 400;\">To avoid stifling innovation, BaFin could introduce special programmes or <\/span><b>easing measures for start-ups<\/b><span style=\"font-weight: 400;\">. Sandbox approaches, already adopted in other countries, would be one possible way to lower the entry barriers for young companies.<\/span>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]<\/p>\n<h2 style=\"text-align: center;\"><span id=\"In_closing\"><strong>In closing<\/strong><\/span><\/h2>\n<p>[\/vc_column_text][vc_separator color=&#8221;juicy_pink&#8221; border_width=&#8221;5&#8243; el_width=&#8221;10&#8243;][vc_message icon_fontawesome=&#8221;fas fa-bars&#8221;]<span style=\"font-weight: 400;\">BaFin\u2019s regulation of ICOs and STOs is <\/span><b>complex<\/b><span style=\"font-weight: 400;\"> but necessary. It offers investor protection and strengthens confidence in the market. At the same time, it presents companies with <\/span><b>challenges<\/b><span style=\"font-weight: 400;\"> that can be mastered through good planning and <a class=\"wpil_keyword_link\" title=\"Beratung\" href=\"https:\/\/www.marketing-faktor.de\/blockchain-beratung\/\" data-wpil-keyword-link=\"linked\" data-wpil-monitor-id=\"1599\">consultation<\/a>. Germany has the chance to position itself as a <\/span><b>leading location<\/b><span style=\"font-weight: 400;\"> for blockchain innovation if it can strike the right balance between protection and freedom.<\/span>[\/vc_message]<div class=\"customblock_display_il\"><a href=\"https:\/\/www.marketing-faktor.de\/en\/application\/\"><img src=\"https:\/\/www.marketing-faktor.de\/wp-content\/uploads\/2020\/06\/Group-1000002123-1.png\"><\/a><\/div>[\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]<\/p>\n<h2 style=\"text-align: center;\"><span id=\"More_articles\"><strong>More articles<\/strong><\/span><\/h2>\n<p>[\/vc_column_text][vc_separator color=&#8221;juicy_pink&#8221; border_width=&#8221;5&#8243; el_width=&#8221;10&#8243;]<div class=\"blog-preview row\"><div class=\"item\" itemtype=\"http:\/\/schema.org\/Blog\"><div class=\"item-sd-container\"><div class=\"photo\"><a itemprop=\"url\" href=\"https:\/\/www.marketing-faktor.de\/krypto-profi\/\"><img itemprop=\"image\" src=\"https:\/\/www.marketing-faktor.de\/wp-content\/uploads\/2024\/12\/Ihr-Experte-fuer-Blockchain-Kryptowaehrungen-Bitcoin-Ethereum-und-Token.png\"><\/a><\/div><div class=\"content\"><a itemprop=\"url\" href=\"https:\/\/www.marketing-faktor.de\/krypto-profi\/\"><div class=\"title\">Krypto Profi: Ihr Experte f\u00fcr Blockchain, Kryptow\u00e4...<\/div><\/a><\/div><\/div><\/div><div class=\"item\" itemtype=\"http:\/\/schema.org\/Blog\"><div class=\"item-sd-container\"><div class=\"photo\"><a itemprop=\"url\" href=\"https:\/\/www.marketing-faktor.de\/web3-consultant\/\"><img itemprop=\"image\" src=\"https:\/\/www.marketing-faktor.de\/wp-content\/uploads\/2024\/12\/Web3-Consulting-fuer-digitale-Transformation-und-innovative-Blockchain-Technologie.png\"><\/a><\/div><div class=\"content\"><a itemprop=\"url\" href=\"https:\/\/www.marketing-faktor.de\/web3-consultant\/\"><div class=\"title\">Web3 Consulting f\u00fcr digitale Transformation und in...<\/div><\/a><\/div><\/div><\/div><div class=\"item\" itemtype=\"http:\/\/schema.org\/Blog\"><div class=\"item-sd-container\"><div class=\"photo\"><a itemprop=\"url\" href=\"https:\/\/www.marketing-faktor.de\/web3-marketing\/\"><img itemprop=\"image\" src=\"https:\/\/www.marketing-faktor.de\/wp-content\/uploads\/2024\/09\/Web3-Marketing-1.png\"><\/a><\/div><div class=\"content\"><a itemprop=\"url\" href=\"https:\/\/www.marketing-faktor.de\/web3-marketing\/\"><div class=\"title\">Web3 Marketing: 10 Tipps f\u00fcr erfolgreiche Vermarkt...<\/div><\/a><\/div><\/div><\/div><\/div>[\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text el_class=&#8221;block-round-corners&#8221;]<div class=\"rating-form  mr-shortcode\">\t<form id=\"rating-form-9831-1\" action=\"#\">\t\t<h4><span id=\"Bewerten_Sie_unseren_Artikel\">Bewerten Sie unseren Artikel<\/span><\/h4><div class=\"rating-item mr \" >\t<label class=\"description\" for=\"rating-item-1-1\">Sample rating item<\/label>\t\t\t\t<span class=\"mr-star-rating mr-star-rating-select\">\t\t<i title=\"1\" id=\"index-1-rating-item-1-1\" class=\"dashicons dashicons-star-empty mr-star-empty index-1-rating-item-1-1\"><\/i>\t\t\t\t<i title=\"2\" id=\"index-2-rating-item-1-1\" class=\"dashicons dashicons-star-empty mr-star-empty index-2-rating-item-1-1\"><\/i>\t\t\t\t<i title=\"3\" id=\"index-3-rating-item-1-1\" class=\"dashicons dashicons-star-empty mr-star-empty index-3-rating-item-1-1\"><\/i>\t\t\t\t<i title=\"4\" id=\"index-4-rating-item-1-1\" class=\"dashicons dashicons-star-empty mr-star-empty index-4-rating-item-1-1\"><\/i>\t\t\t\t<i title=\"5\" id=\"index-5-rating-item-1-1\" class=\"dashicons dashicons-star-empty mr-star-empty index-5-rating-item-1-1\"><\/i>\t\t<\/span>\t\t\t\t<!-- hidden field for storing selected star rating value --><input type=\"hidden\" name=\"rating-item-1-1\" id=\"rating-item-1-1\" value=\"0\">\t<span id=\"rating-item-1-1-error\" class=\"mr-error\"><\/span><\/div>\t\t\t<!-- hidden field to get rating item id -->\t\t\t<input type=\"hidden\" value=\"1\" class=\"rating-item-9831-1\" id=\"hidden-rating-item-id-1\" \/>\t\t\t\t\t<div class=\"wp-block-button\">\t\t\t<input type=\"submit\" class=\"wp-block-button__link save-rating\" id=\"saveBtn-9831-1\" value=\"Bewertung abgeben\"><\/input>\t\t<\/div>\t\t<input type=\"hidden\" name=\"sequence\" value=\"1\" \/>\t\t\t\t\t<\/form><\/div>[\/vc_column_text][\/vc_column][\/vc_row]<\/p>\n<\/section>","protected":false},"author":3,"featured_media":11540,"menu_order":0,"comment_status":"open","ping_status":"closed","template":"","format":"standard","meta":{"rating_form_position":"","rating_results_position":"","mr_structured_data_type":""},"categories":[952],"tags":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v19.14 - 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Innovative, digital, and global \u2013 these methods are transforming how companies raise money for their projects. But it\u2019s not a free-for-all in Germany. The Federal Financial Supervisory Authority (BaFin) has set clear rules designed to protect investors and steer the market. How does that work in practice? What opportunities arise \u2013 and where are the obstacles? Here you\u2019ll learn what you need to know about the current regulation of ICOs and STOs in Germany.\\r\\nWhat are ICOs (Initial Coin Offerings) and STOs (Security Token Offerings)?\\r\\nICOs (Initial Coin Offerings) are a method of capital raising in which companies sell digital tokens to investors, usually in exchange for cryptocurrencies such as Bitcoin or Ethereum. Within a project or ecosystem, these tokens often serve a specific purpose \u2013 for example, as a means of payment or an access key to a platform. A well-known example is Ethereum itself, which laid the foundation for its worldwide acceptance through an ICO in 2014. Important to know: ICO tokens are generally not securities but so-called utility tokens, which resemble a voucher or usage ticket.\\r\\n\\r\\nSTOs (Security Token Offerings) take a decisive step further and are, from a legal perspective, securities offerings. The security tokens issued represent shares in a company, rights to future profits, or interest payments. They give investors a legally secured position similar to traditional stocks or bonds. A prominent example is Bitbond\u2019s STO campaign in 2019, which allowed investors to participate in a tokenized lending fund. Because of their financial nature, STOs are subject to the strict requirements of securities law, making them more regulated and often more attractive to institutional investors.\\r\\nWhat role does BaFin play in ICOs and STOs?\\r\\n&nbsp;\\r\\n\\r\\n\\r\\n&nbsp;\\r\\n\\r\\n\\r\\nBaFin has a central task: it supervises the financial market in Germany, protects investors, and ensures stable market integrity. Especially with ICOs and STOs it plays a key role because it defines the legal framework and sets clear standards. Without this regulation, the market would quickly lose confidence.\\r\\nLegal classification of Initial Coin Offerings by BaFin\\r\\n&nbsp;\\r\\n\\r\\n\\r\\n&nbsp;\\r\\n\\r\\n\\r\\nWhether a token qualifies as a financial instrument is determined by BaFin on a case-by-case basis. It looks closely at the token\u2019s structure and function. Utility tokens that merely grant access to services or products generally fall outside the scope of the Securities Trading Act. The picture is very different for security tokens, where the Securities Prospectus Act (WpPG) applies, requiring the preparation of a comprehensive prospectus. This document must provide investors with all essential information so they can make informed decisions.\\r\\nRequirements for issuers\\r\\nThe requirements vary depending on the type of token offering. ICOs are subject to less stringent rules but must still provide clear and understandable information. Issuers are obliged to inform potential buyers about the risks and functions of the tokens. For STOs the bar is much higher: an approved prospectus is mandatory, as is compliance with the MiFID II directives (Markets in Financial Instruments Directive). These requirements create transparency but also increase the workload for companies.\\r\\nCombating money laundering\\r\\nAnother focus is on the prevention of money laundering. BaFin requires issuers to implement measures for investor identification and transaction tracing. This ensures that platforms are not used for illegal activities. These requirements make the market safer but also pose technical and organizational challenges for providers.\\r\\nAdvantages of regulation\\r\\nClear regulation by BaFin offers numerous advantages. It creates legal certainty for all parties involved and strengthens trust in these new financing instruments. Companies know what they are getting into, and investors feel better protected. Overall, the market becomes more attractive and stable.\\r\\nInvestor protection\\r\\nIn the past, there were several cases of fraud in the ICO sector that unsettled investors. Thanks to BaFin, such cases are increasingly a thing of the past. Clear guidelines and transparency obligations make it difficult for dubious providers to gain a foothold, while investors can make more informed decisions.\\r\\nPromoting market acceptance\\r\\nInstitutional investors often hesitate when markets are unregulated. A clear legal basis from BaFin therefore significantly increases the acceptance of ICOs and STOs. Investors appreciate the additional security and see regulated products as more attractive. The blockchain ecosystem benefits in the long term from this improved market acceptance.\\r\\nEncouraging innovation\\r\\nWith the right balance between regulation and freedom, Germany could become a leading location for blockchain innovation. A clear legal framework enables companies to implement new projects safely and efficiently while signaling stability and reliability to investors \u2013 a win-win for the market and the economy.\\r\\nWhat challenges arise from BaFin regulation?\\r\\nBaFin regulation undoubtedly offers many advantages but also brings challenges that companies must overcome. Smaller firms and start-ups in particular face significant hurdles, as the requirements can be time-consuming and costly. Finding the balance between innovative entrepreneurship and regulatory compliance is no easy task.\\r\\nHigh costs\\r\\nComplying with regulatory requirements is expensive. Drafting a securities prospectus alone can swallow up a high five-figure sum. This burden hits start-ups particularly hard, as they often operate with limited capital. For some, this is a reason not to launch an STO at all.\\r\\nComplexity\\r\\nThe legal classification of a token is rarely clear-cut. Companies must determine whether they meet BaFin\u2019s requirements, which is hardly feasible without external advisors. This effort complicates the process and often delays market launch.\\r\\nInternational competition\\r\\nStrict regulations make Germany less attractive, while countries like Switzerland or Singapore score with simpler requirements. Companies and investors might therefore migrate, which could weaken Germany\u2019s position as an innovation hub in the long run.\\r\\nExamples from practice\\r\\n&nbsp;\\r\\n\\r\\n\\r\\n&nbsp;\\r\\n\\r\\n\\r\\nSeveral German companies have successfully carried out ICOs and STOs. A well-known example is the Neufund platform, which specialises in STOs and offers investors access to tokenized securities. These projects show that BaFin regulation can be not an obstacle but an opportunity when used correctly.\\r\\n\\r\\nAnother example is Bitbond GmbH, which conducted Germany\u2019s first fully regulated STO in 2019. This case underscores that it is possible to meet BaFin\u2019s requirements while addressing investors worldwide.\\r\\nThe future of ICO and STO regulation in Germany\\r\\n&nbsp;\\r\\n\\r\\n\\r\\n&nbsp;\\r\\n\\r\\n\\r\\nThe regulation of ICOs and STOs remains a dynamic topic. New technologies and market requirements call for continuous adjustments to the regulations.\\r\\nEuropean harmonization\\r\\nAt EU level, work is underway on a uniform regulation of cryptocurrencies and tokens, the so-called MiCA regulation (Markets in Crypto-Assets). This could supplement or replace existing national rules, bringing greater consistency across the EU.\\r\\nTechnological developments\\r\\n&nbsp;\\r\\n\\r\\n\\r\\n&nbsp;\\r\\n\\r\\n\\r\\nBlockchain technologies are evolving rapidly. In the future, BaFin will have to address new types of tokens such as NFTs (Non-Fungible Tokens) and DeFi (Decentralized Finance). This could once again present challenges for regulation.\\r\\nSupporting start-ups\\r\\nTo avoid stifling innovation, BaFin could introduce special programmes or easing measures for start-ups. Sandbox approaches, already adopted in other countries, would be one possible way to lower the entry barriers for young companies.\\r\\nIn closing\\r\\nBaFin\u2019s regulation of ICOs and STOs is complex but necessary. It offers investor protection and strengthens confidence in the market. At the same time, it presents companies with challenges that can be mastered through good planning and consultation. Germany has the chance to position itself as a leading location for blockchain innovation if it can strike the right balance between protection and freedom.\\r\\nMore articles\\r\\n\"}}}}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"ICO BaFin: Current regulation of initial coin offerings","description":"What does BaFin say about prospectus and licensing requirements for Initial Coin Offerings ICOs and crypto tokens for security? 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Innovative, digital, and global \u2013 these methods are transforming how companies raise money for their projects. But it\u2019s not a free-for-all in Germany. The Federal Financial Supervisory Authority (BaFin) has set clear rules designed to protect investors and steer the market. How does that work in practice? What opportunities arise \u2013 and where are the obstacles? Here you\u2019ll learn what you need to know about the current regulation of ICOs and STOs in Germany.\r\nWhat are ICOs (Initial Coin Offerings) and STOs (Security Token Offerings)?\r\nICOs (Initial Coin Offerings) are a method of capital raising in which companies sell digital tokens to investors, usually in exchange for cryptocurrencies such as Bitcoin or Ethereum. Within a project or ecosystem, these tokens often serve a specific purpose \u2013 for example, as a means of payment or an access key to a platform. A well-known example is Ethereum itself, which laid the foundation for its worldwide acceptance through an ICO in 2014. Important to know: ICO tokens are generally not securities but so-called utility tokens, which resemble a voucher or usage ticket.\r\n\r\nSTOs (Security Token Offerings) take a decisive step further and are, from a legal perspective, securities offerings. The security tokens issued represent shares in a company, rights to future profits, or interest payments. They give investors a legally secured position similar to traditional stocks or bonds. A prominent example is Bitbond\u2019s STO campaign in 2019, which allowed investors to participate in a tokenized lending fund. Because of their financial nature, STOs are subject to the strict requirements of securities law, making them more regulated and often more attractive to institutional investors.\r\nWhat role does BaFin play in ICOs and STOs?\r\n&nbsp;\r\n\r\n\r\n&nbsp;\r\n\r\n\r\nBaFin has a central task: it supervises the financial market in Germany, protects investors, and ensures stable market integrity. Especially with ICOs and STOs it plays a key role because it defines the legal framework and sets clear standards. Without this regulation, the market would quickly lose confidence.\r\nLegal classification of Initial Coin Offerings by BaFin\r\n&nbsp;\r\n\r\n\r\n&nbsp;\r\n\r\n\r\nWhether a token qualifies as a financial instrument is determined by BaFin on a case-by-case basis. It looks closely at the token\u2019s structure and function. Utility tokens that merely grant access to services or products generally fall outside the scope of the Securities Trading Act. The picture is very different for security tokens, where the Securities Prospectus Act (WpPG) applies, requiring the preparation of a comprehensive prospectus. This document must provide investors with all essential information so they can make informed decisions.\r\nRequirements for issuers\r\nThe requirements vary depending on the type of token offering. ICOs are subject to less stringent rules but must still provide clear and understandable information. Issuers are obliged to inform potential buyers about the risks and functions of the tokens. For STOs the bar is much higher: an approved prospectus is mandatory, as is compliance with the MiFID II directives (Markets in Financial Instruments Directive). These requirements create transparency but also increase the workload for companies.\r\nCombating money laundering\r\nAnother focus is on the prevention of money laundering. BaFin requires issuers to implement measures for investor identification and transaction tracing. This ensures that platforms are not used for illegal activities. These requirements make the market safer but also pose technical and organizational challenges for providers.\r\nAdvantages of regulation\r\nClear regulation by BaFin offers numerous advantages. It creates legal certainty for all parties involved and strengthens trust in these new financing instruments. Companies know what they are getting into, and investors feel better protected. Overall, the market becomes more attractive and stable.\r\nInvestor protection\r\nIn the past, there were several cases of fraud in the ICO sector that unsettled investors. Thanks to BaFin, such cases are increasingly a thing of the past. Clear guidelines and transparency obligations make it difficult for dubious providers to gain a foothold, while investors can make more informed decisions.\r\nPromoting market acceptance\r\nInstitutional investors often hesitate when markets are unregulated. A clear legal basis from BaFin therefore significantly increases the acceptance of ICOs and STOs. Investors appreciate the additional security and see regulated products as more attractive. The blockchain ecosystem benefits in the long term from this improved market acceptance.\r\nEncouraging innovation\r\nWith the right balance between regulation and freedom, Germany could become a leading location for blockchain innovation. A clear legal framework enables companies to implement new projects safely and efficiently while signaling stability and reliability to investors \u2013 a win-win for the market and the economy.\r\nWhat challenges arise from BaFin regulation?\r\nBaFin regulation undoubtedly offers many advantages but also brings challenges that companies must overcome. Smaller firms and start-ups in particular face significant hurdles, as the requirements can be time-consuming and costly. Finding the balance between innovative entrepreneurship and regulatory compliance is no easy task.\r\nHigh costs\r\nComplying with regulatory requirements is expensive. Drafting a securities prospectus alone can swallow up a high five-figure sum. This burden hits start-ups particularly hard, as they often operate with limited capital. For some, this is a reason not to launch an STO at all.\r\nComplexity\r\nThe legal classification of a token is rarely clear-cut. Companies must determine whether they meet BaFin\u2019s requirements, which is hardly feasible without external advisors. This effort complicates the process and often delays market launch.\r\nInternational competition\r\nStrict regulations make Germany less attractive, while countries like Switzerland or Singapore score with simpler requirements. Companies and investors might therefore migrate, which could weaken Germany\u2019s position as an innovation hub in the long run.\r\nExamples from practice\r\n&nbsp;\r\n\r\n\r\n&nbsp;\r\n\r\n\r\nSeveral German companies have successfully carried out ICOs and STOs. A well-known example is the Neufund platform, which specialises in STOs and offers investors access to tokenized securities. These projects show that BaFin regulation can be not an obstacle but an opportunity when used correctly.\r\n\r\nAnother example is Bitbond GmbH, which conducted Germany\u2019s first fully regulated STO in 2019. This case underscores that it is possible to meet BaFin\u2019s requirements while addressing investors worldwide.\r\nThe future of ICO and STO regulation in Germany\r\n&nbsp;\r\n\r\n\r\n&nbsp;\r\n\r\n\r\nThe regulation of ICOs and STOs remains a dynamic topic. New technologies and market requirements call for continuous adjustments to the regulations.\r\nEuropean harmonization\r\nAt EU level, work is underway on a uniform regulation of cryptocurrencies and tokens, the so-called MiCA regulation (Markets in Crypto-Assets). This could supplement or replace existing national rules, bringing greater consistency across the EU.\r\nTechnological developments\r\n&nbsp;\r\n\r\n\r\n&nbsp;\r\n\r\n\r\nBlockchain technologies are evolving rapidly. In the future, BaFin will have to address new types of tokens such as NFTs (Non-Fungible Tokens) and DeFi (Decentralized Finance). This could once again present challenges for regulation.\r\nSupporting start-ups\r\nTo avoid stifling innovation, BaFin could introduce special programmes or easing measures for start-ups. Sandbox approaches, already adopted in other countries, would be one possible way to lower the entry barriers for young companies.\r\nIn closing\r\nBaFin\u2019s regulation of ICOs and STOs is complex but necessary. It offers investor protection and strengthens confidence in the market. At the same time, it presents companies with challenges that can be mastered through good planning and consultation. Germany has the chance to position itself as a leading location for blockchain innovation if it can strike the right balance between protection and freedom.\r\nMore articles\r\n"}}}}]}},"multi-rating":{"mr_rating_results":[{"adjusted_star_result":0,"star_result":0,"total_max_option_value":5,"adjusted_score_result":0,"score_result":0,"percentage_result":0,"adjusted_percentage_result":0,"count":0,"post_id":11633}]},"_links":{"self":[{"href":"https:\/\/www.marketing-faktor.de\/en\/wp-json\/wp\/v2\/blog_posts\/11633"}],"collection":[{"href":"https:\/\/www.marketing-faktor.de\/en\/wp-json\/wp\/v2\/blog_posts"}],"about":[{"href":"https:\/\/www.marketing-faktor.de\/en\/wp-json\/wp\/v2\/types\/blog_posts"}],"author":[{"embeddable":true,"href":"https:\/\/www.marketing-faktor.de\/en\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.marketing-faktor.de\/en\/wp-json\/wp\/v2\/comments?post=11633"}],"version-history":[{"count":7,"href":"https:\/\/www.marketing-faktor.de\/en\/wp-json\/wp\/v2\/blog_posts\/11633\/revisions"}],"predecessor-version":[{"id":13595,"href":"https:\/\/www.marketing-faktor.de\/en\/wp-json\/wp\/v2\/blog_posts\/11633\/revisions\/13595"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.marketing-faktor.de\/en\/wp-json\/wp\/v2\/media\/11540"}],"wp:attachment":[{"href":"https:\/\/www.marketing-faktor.de\/en\/wp-json\/wp\/v2\/media?parent=11633"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.marketing-faktor.de\/en\/wp-json\/wp\/v2\/categories?post=11633"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.marketing-faktor.de\/en\/wp-json\/wp\/v2\/tags?post=11633"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}