VIRTUAL CURRENCIES – INITIAL COIN OFFERING (ICO) / INITIAL TOKEN OFFERING (ITO)

Similar to IPOs potential investors of ICOs/ITOs are offered “Coins” or “Tokens” in return for their (virtual) capital. While Tokens are based on an already existing Blockchain (Smart Contracts) Coins are based on a newly developed Blockchain.

In case a company intends the issuance of Coins or Tokens various aspects have to be considered. Such aspects may be divided into (1) Technology; (2) Legal; (3) Business and (4) Marketing.

In our current blog we will deal with “Legal” and “Marketing”. The reason for combining those two subjects is that under Austrian/European capital market regulations marketing (brochures, internet, TV, etc) for investments is restricted to some extent.

Issuers must check whether the respective ICO/ITO is to be regarded as a public offer which requires a capital market prospectus. While the Austrian Financial Market Authority currently does not qualify Coins/Tokens as securities/financial instruments in general, they already have intervened with previous ICOs/ITOs.

Irrespective of the qualification of Coins/Tokens as securities by the Austrian FMA issuers also have to consider legal aspects on Austrian civil law. For instance, from a civil law perspective Whitepapers could be qualified as capital market prospectuses with respect to prospectus liability.

Hence, particularly liability regulations with respect to prospectus liability should be considered. Due to our extensive experience we can help you to examine and reduce risks regarding ICOs/ITOs.

We would be happy to assist you by:

  • Review and Examination of your business model regarding current banking and capital market regulations comprising statement on potential future regulation risks.
  • Support regarding discussions on the business model with the Austrian Financial Market Authority;
  • Legal Advisory of your company during the ICO-/ITO-process including our network of auditors, IT-specialists, PR-consultants.
  • Support in potential supervisory-, civil or criminal proceedings with a team of domestic and foreign specialized lawyers (e.g. commercial criminal law), auditors and litigation-media-experts.

In case of individual questions, we would be happy to invite you to a personal meeting to discuss your needs and to show you how we can assist you.

Simply send us an e-mail to: GL@GEORGESLESER.COM