Blockchain and Crypto Currencies

Advancements in Distributed Ledger Technology (DLT) and the Blockchain have empowered businesses to develop and distribute encrypted tokens, often referred to as “crypto-currency”, and to use “smart contracts” to facilitate transactions as well as for the purpose of customizing the operations of decentralized applications (“Dapps”). In recent years, businesses have turned to token generation as […]

Advancements in Distributed Ledger Technology (DLT) and the Blockchain have empowered businesses to develop and distribute encrypted tokens, often referred to as “crypto-currency”, and to use “smart contracts” to facilitate transactions as well as for the purpose of customizing the operations of decentralized applications (“Dapps”). In recent years, businesses have turned to token generation as a means to raise capital through “Initial Coin Offerings” (“ICOs”) and, most recently, under Security Token Offerings or “STOs”

Cross-border in nature and considered a novelty, many of these rapid developments have generated a long list of complex legal dilemmas and issues. Regulators and tax authorities are frantically working to familiarize themselves with this new technology so they can effectively address the challenges it poses and fill these legal gaps. Similarly, financial institutions and other gatekeepers are developing their positions with respect to digital tokens and the transactions associated with them.

Along with an international network of expert advisers in the legal arena as well as in the technology, PR and marketing spheres, we provide an interdisciplinary, global regulatory advisory service to businesses in the crypto-currency and blockchain spheres. As regulatory developments constantly evolve, we provide our clients with up-to-date legal advice, built on a strong understanding of the industry and its characteristics.

Working closely with other service providers (technology, PR and marketing), we provide a fully coordinated range of services to our clients, including regulatory, tax, commercial, corporate, banking, and intellectual property issues.

Our specialties include:

  • Advising clients on token issuance or ICOs and guiding them through this complex process end-to-end in coordination with other service providers;
  • Advising clients in the post-ICO stage with respect to token management, trading, storage and processing;
  • Assistance in implementation of crypto-currency solutions within existing businesses; and,
  • Advising clients wishing to engage in trading, exchange, and investments in crypto-currencies, including setting up licensed crypto-currency exchanges abroad.

Blockchain Technology

We help the most exciting blockchain companies in the world launch and expand their cutting-edge products and services in an increasingly complex and demanding legal and regulatory environment.

We provide our clients with the following services:

  • Guiding blockchain clients through the basics of business formation, financing, content regulation and website management;
  • Helping clients procure, protect and deploy their intellectual property; and,
  • Providing legal solutions involving encryption, multi-jurisdictional product offerings and domain name registration.

Initial Coin Offerings (ICOs) and Security Token Offerings (STOs)

Much like an IPO, the Initial Coin Offering (ICO) is a form of capital raising. Unlike an IPO, the ICO model is more of a hybrid form of fundraising, combining aspects of crowdfunding, venture capital investment, and IPO. At its core, an ICO is the public offering -or presale- of crypto-tokens to potential investors and supporters of the crypto-currency eco-system. It is conducted as a crowdfunding campaign typically through the use of a website or portal. Captioned in a business plan or prototype paper, the ICO resembles an early stage venture capital investment product and, much like the shares resulting from an IPO, the end product is tradeable.

The duration of ICOs is typically limited by either a clearly defined deadline or a cap on the raised funds.

With regards to pricing, the organizers of the ICO either set a static price and issue the tokens as funds are raised from the ICO, or, issue a pre-defined number of tokens and determine their value based on the amount of funds raised.

From legal and regulatory perspectives, an ICO presents several challenges, all derived from its hybrid characteristic:

  1. The need to consider whether any rules and best practices from the crowdfunding world are applicable, such as restrictions on marketing techniques, number and type of investors, and the total and/or minimum amount which can be raised.
  2. The need to review the contents of the business plan or prototype and advise as to any necessary or required statements and disclosures which need to be included.
  3. The need to perform an analysis of the product to be offered and traded in order to provide a concise legal opinion as to the applicability or non-applicability of securities laws and regulations.

In the absence of clearly defined rules and regulations by regulatory authorities, it is incumbent upon us to develop and apply best practices and apply the existing regulatory framework to ICOs, while staying up to date on regulatory developments, which will certainly arrive.

We embrace the challenge of turning creative and innovative technologies into reality. Due to the acumen of our staff, we are fully capable of assisting you through each step of your successful ICO by providing your campaign the following legal services:

  1. Advising as to the adequate legal entity (company, partnership, other)
  2. Advising as to the adequate jurisdiction to set up the legal entity
  3. Advising as to applicable restrictions on marketing and solicitation
  4. Drafting and reviewing your business plan/ prototype proposal
  5. Advising as to any and all applicable regulatory requirements
  6. Setting up connections and agreements with banking and payments solutions
  7. Advising as to applicable taxation implications
  8. Drafting and reviewing of all types of commercial agreements

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