The development of distributed ledger technology (“DLT”) as well as blockchain technology has generated the emergence of crypto-assets. Crypto-assets, but especially cryptocurrencies, and the technologies mentioned above have brought profound changes in both the financial sector and other sectors such as e-commerce and capital markets, generating the private sector’s interest in the use of crypto-assets, which in turn naturally, has attracted the attention of regulatory authorities.
The authorities have analyzed both the opportunities and the challenges of crypto-assets, and have committed to implementing a legislative framework that takes advantage of the potential opportunities the crypto-assets offer.
Crypto-assets are widely used by individuals and companies in a variety of ways, such as purchasing and holding them for investment purposes for a longer period (hodl), purchasing and trading them on crypto exchange/trading platforms (trading), payment for products and services using crypto-assets, financing through crypto-assets, use of crypto-assets for software application development.
The crypto exchanges, investors, and companies intending to carry out IEO, ICO, IDO, and STO projects are facing various challenges such as lack of regulations or major differences between the regulations of the states in which they are to be carried out, increasing complex contractual issues and AML / CTF compliance requirements.
By using legal services both for regulatory issues and for negotiating contracts and drafting the necessary documentation, companies, and investors ensure the success of their projects by eliminating or reducing legal risks.
NewLegalWay provides legal advice on Crypto on the following aspects:
Tokens and other crypto-assets
- Non-Disclosure Agreements (NDAs);
- Consultancy regarding the issuance of crypto-assets (tokens, cryptocurrencies, crypto / crypto-securities) and establishing the legal regime related to them;
- Analysis and qualification of tokens as security tokens, utility tokens, asset-related tokens (stablecoins), non-fungible tokens (NFTs);
- Consultancy on privacy by design in case of blockchain projects, issuance of tokens (setting scope and means of processing, governance system, consensus mechanism, data encryption and application of the hash cryptographic function, identification of personal data controllers and their obligations, data transfer), for more details see the sections Personal data protection and Consumer Protection and Technology and Intellectual Property.
IEO, ICO, IDO, and STO
- Consultancy on the type of offers to be carried out: Initial Exchange Offering (IEO), Initial Coin Offering (ICO), Initial Decentralized Exchange Offering (IDO), Security Token Offering (STO), structuring IEO, ICO, IDO and STO projects.
- Drafting legal opinions on the utility token character of some tokens to be listed on crypto exchanges within Initial Exchange Offering (IEO);
- Assisting companies that already have an MVP (Minimum Viable Product) in communications and negotiations with crypto exchanges-CEX, investors, ICO platforms, marketing agencies;
- Consultancy on the content and information disclosed in the White Paper, revising the White Paper, drafting disclaimers, consultancy on transparency and published information after listing on the crypto-exchange or conducting the ICO offer;
- Advice and assistance on attracting investors in a pre-sale phase before conducting an ICO;
- Drafting and revising agreements (Early Sale Contribution Agreements, Simple Agreement for Future Tokens-SAFTs, advisors service agreements, strategic advisors agreements, influencers service agreements, distribution agreements);
- Advice and assistance in discussions with venture capital funds (VC Funds), preparation and negotiation of documentation with investors, for more details see the section Financing and Crowdfunding;
- Due Diligence before listing on crypto-exchange / CEX;
- Recommendations on all KYC procedures;
- Consultancy provided to crypto exchanges (CEXs) on KYC / AML, marketing, service provisions, and trading activities, CFDs on cryptocurrencies, cryptocurrencies, investors protection, and other aspects of Regulatory Compliance;
- Consultancy on the authorization of the provider of exchange services between virtual currencies and fiat currencies (crypto exchange-CEX) and its obligations in preventing money laundering and combating terrorist financing -AML / CTF (application of KYC / Know Your Customer measures, identification of the real beneficiary, application screening measures, monitoring and reporting of suspicious transactions);
- Advice on the obligations of digital wallet providers (crypto wallet) on prevention money laundering and combating terrorist financing -AML / CTF.
Financial instruments and e-money
- Advice on the interaction of crypto-assets with the legislation on financial instruments and financial services (where security tokens are considered to be financial instruments, in case of crypto-securities, in case of DLT technology’ use in trading, custody, and settlement of financial instruments, as well as in crypto-assets trading and post-trading);
- Drafting a memorandum on the security token’s characteristics of a particular token and indicating the legal regime applicable to financial instruments, advice on the prospectus and requirements related to financial services and financial instruments;
- Consultancy on the interaction of crypto-assets with e-money legislation.
DeFI (Decentralized Finance)
- Advice on DeFI (decentralized finance) regarding the incidence of existing or future legislation;
- Consultancy on decentralized exchanges (DEX) and listing of Initial Decentralized Exchange Offering/IDOs;
- Consultancy on decentralized lending and decentralized insurance services;
- Drafting disclaimers for projects’ websites;
- Training and seminars on crypto-assets.