Tunisia -- Securities Classification Regulatory Overview

Tunisia, like many jurisdictions without specific dedicated cryptocurrency legislation, relies on its existing financial market laws to determine whether a cryptocurrency token constitutes a security. The primary regulatory body for securities in Tunisia is the Conseil du Marché Financier (CMF).

1. Legal Test Used (Howey Test Equivalent):

Tunisia does not explicitly use a test named "Howey Test." Instead, the CMF would apply a "substance over form" analysis based on the definitions of "securities" and "financial instruments" outlined in Tunisian law, particularly Law No. 94-117 of November 14, 1994, on the Reorganization of the Financial Market (and its subsequent amendments).

The legal test would involve assessing whether a token possesses the characteristics of a traditional security. This typically includes looking at:

• Nature of the Instrument: Does it represent an ownership interest (like a share), a debt obligation (like a bond), or a right to a share of profits or assets?
• Expectation of Return: Is there an expectation of profit or financial return for the investor?
• Reliance on Efforts of Others: Are these expected returns derived primarily from the entrepreneurial or managerial efforts of a third party (the issuer or its team)?
• Marketability/Transferability: Is the instrument designed to be traded or transferred on a market?
• Public Offering: Is it offered to the general public for investment purposes?

If a crypto token exhibits these characteristics, particularly an expectation of profit generated by the issuer's efforts, it would likely be classified as a security under Tunisian law.

2. Which Tokens are Considered Securities:

Based on the above legal test, the CMF would likely consider the following types of tokens as securities:

• Investment Tokens/Security Tokens (STOs): Tokens that are offered to raise capital for a project or company, where investors expect a financial return (e.g., profit sharing, dividends, interest, or appreciation in value) based on the issuer's performance or assets.
• Equity Tokens: Tokens that represent ownership stakes in a company, granting rights similar to traditional shares (e.g., voting rights, dividend rights, liquidation rights).
• Debt Tokens: Tokens that represent a loan made to an issuer, entitling the holder to principal repayment and/or interest payments.
• Tokens Linked to Tangible Assets: Tokens representing fractional ownership of real estate, commodities, or other assets, where the value and potential returns are tied to the underlying asset and managed by the issuer.
• Certain Hybrid Utility Tokens: If a "utility token" is primarily marketed or structured as an investment vehicle with an expectation of profit from the issuer's efforts, rather than solely for access to a product or service, it could be reclassified as a security.

Tokens generally NOT considered securities (but subject to other regulations):

• Payment Tokens/Cryptocurrencies (e.g., Bitcoin, pure Ether): Tokens primarily functioning as a medium of exchange, unit of account, or store of value, without being issued by a specific entity to fund a venture with an expectation of profit from that entity's efforts. The Central Bank of Tunisia (BCT) has, however, issued strong warnings against the use of these cryptocurrencies due to their unregulated nature, volatility, and risks (e.g., money laundering, terrorist financing).
• Pure Utility Tokens: Tokens that solely grant access to a specific product or service on a blockchain network, where their value is tied to their utility within that ecosystem, and there is no primary investment expectation of profit from the issuer's efforts.

3. Registration/Exemption Requirements for Token Issuers:

If a cryptocurrency token is deemed a security in Tunisia, its issuance falls under the full scope of Tunisian securities regulations.

• Public Offering (Issuance to the Public):

  • CMF Approval: Issuers must obtain prior authorization from the CMF for any public offering of securities.
  • Prospectus Requirement: A detailed prospectus must be prepared and approved by the CMF. This prospectus must contain comprehensive information about the issuer, the project, the financial health of the issuer, the characteristics of the tokens, the risks involved, and how the proceeds will be used.
  • Licensing: Issuers and any intermediaries involved in the offering (e.g., financial advisors, placement agents) must be licensed by the CMF.
  • Corporate Governance: The issuer must comply with relevant corporate governance and transparency rules.

• Private Placement:

  • While not requiring the full public offering prospectus, private placements (offerings to a limited number of qualified investors) would still be subject to general anti-fraud provisions of securities law and potentially other notification requirements to the CMF. The exact thresholds and definitions of "private placement" versus "public offering" are defined in Tunisian law.

4. Secondary Trading Rules:

• Regulated Market: If a security token is to be traded on a regulated secondary market (e.g., a stock exchange or a regulated multilateral trading facility), it would need to be listed on such a market and comply with all applicable rules and regulations of that market and the CMF. This includes transparency requirements, continuous disclosure obligations, market abuse rules, and investor protection measures.
• Over-the-Counter (OTC) Trading: Unlicensed OTC trading of security tokens would generally be prohibited. Any entity facilitating secondary trading of security tokens would likely need to be licensed by the CMF as a financial intermediary.

5. Enforcement Examples:

As of my last update, there are no widely publicized enforcement actions in Tunisia specifically detailing the prosecution of a cryptocurrency token issuer for offering unregistered securities (e.g., an ICO/STO deemed an illegal securities offering).

Tunisia's regulatory focus regarding cryptocurrencies has largely been on:

• General Warnings: The Central Bank of Tunisia (BCT) has repeatedly issued warnings to the public about the risks associated with investing in, transacting with, or holding cryptocurrencies like Bitcoin. These warnings typically highlight the lack of legal tender status, absence of regulatory oversight, high volatility, and risks of fraud, money laundering, and terrorist financing.
• Prohibition of Payment/Exchange: The BCT's stance effectively prohibits licensed financial institutions from dealing with cryptocurrencies and restricts individuals from using them for payments or exchange through regulated channels. This is more related to monetary policy, financial stability, and AML/CFT concerns rather than specific securities regulation of tokens.

The absence of specific enforcement cases regarding crypto securities suggests:

1. The market for such offerings in Tunisia is either very nascent or non-existent through formal channels.
2. Authorities might be taking a cautious "wait and see" approach for innovative blockchain applications while prioritizing stability and consumer protection.
3. Any potential issues might be handled through administrative warnings or informal measures rather than public prosecutions.

Specific Legislation and Regulatory Guidance URLs:

• Law No. 94-117 of November 14, 1994, on the Reorganization of the Financial Market: This is the cornerstone legislation. It's often available in French on Tunisian legal resource websites.
  • While a direct official English translation link is hard to find, the official French text can be sought on sites like Jurisite Tunisia (jurisitetunisie.com) by searching for "Loi n° 94-117 du 14 novembre 1994."
• Conseil du Marché Financier (CMF) - Official Website: The primary regulator for securities.
  • https://www.cmf.tn/ (Content primarily in French and Arabic)
• Central Bank of Tunisia (BCT) - Official Website: The BCT issues warnings and guidance regarding general cryptocurrency risks. Look for press releases or circulars concerning digital assets.
  • https://www.bct.gov.tn/ (Content primarily in French and Arabic)

Important Note: The regulatory landscape for cryptocurrencies is rapidly evolving globally. While Tunisia currently applies existing laws, a specific regulatory framework for digital assets, including security tokens, could be developed in the future. It is crucial for anyone considering issuing or trading such tokens in Tunisia to seek specific legal advice from a qualified Tunisian legal professional.