Our firm provides a broad spectrum of advice for ICOs. Armed with an in-depth understanding of the regulatory issues, our lawyers have the knowledge and experience to ensure that our clients projects’ are fully compliant with the myriad of complex regulations in the cryptocurrency space.
As the use of Bitcoin and other altcoins increases in volume, as well as the rising popularity of fundraising for projects by way of an ICO, certain jurisdictions have taken clearer positions on the regulatory front (like the United States, Switzerland, Gibraltar and Malta), while others are yet to make their definitive statements on ICO and Cryptocurrency regulation (such as the United Kingdom regulator, FCA). The UK is still seen as one of the most favoured jurisdictions for Cryptocurrency, partly because of its “technology neutral” approach.
While regulation is necessary in order to open up the markets to further participants, and protect the retail consumer (the original target group for ICOs), due to the amount of attention this form of fundraising has garnered, it is now more important than ever to ensure that you engage an experienced cryptocurrency lawyer from the beginning, who can both interpret, advise and respond to the evolving regulatory environment.
Our services include:
For the ICO Sponsor:
– Press release review;
– Whitepaper drafting and review, including legal disclaimer;
– SAFT drafting and review;
– Token Purchase Agreement and Terms of Sale;
– ICO Private Placement Memorandum / Offering Document drafting and review;
– Various ancillary legal documents, including employment contracts, website disclaimers and terms and conditions, as well as any relevant advertising agreements;
– Risk assessment in the pre-ICO stage, including securities and regulated activities regulations;
– Legal report for the relevant Token (Security or Utility), based on the Whitepaper (usually required by the banks or exchanges);
– Post-ICO legal management;
– Fund liquidation and distribution;
– International AML/KYC Support because the onus is on the ICO to ensure you are not participating in, or facilitating, money laundering as well as to understand the normal behaviour of customers;
– Jurisdiction Analysis; and
– Regulatory analysis and advice => relating to funds, payments, financial promotions, regulated activities and e-money regulations.
For the ICO investor (the Token Purchaser):
– Full due diligence and legal analysis of the standard ICO documentation, including the White Paper, the Private Placement Memorandum and the SAFT/Token Agreement;
– Summary of the ICO’s regulatory compliance and disclosure of relevant risks;
– Advice on the current regulatory obligations of ICO Sponsors; and
– Summary of disclosed, and other risks, associated with the ICO.
Frequently Asked Questions
What is an ICO?
The FCA definition: “The term ICO refers to a digital way of raising funds from the public using a virtual currency, also known as cryptocurrency. An ICO can also be known as ‘token sale’ or ‘coin sale’. ICO issuers accept a cryptocurrency, like Bitcoin or Ether, in exchange for a proprietary ‘coin’ or ‘token’ that is related to a specific firm or project. ICOs vary widely in design. The digital token issued may represent a share in a firm, a prepayment voucher for future services or in some cases offer no discernible value at all. Often ICO projects are in a very early stage of development.”
Does my ICO need a lawyer to review our white paper?
Do I need an ICO lawyer to review the white paper from a Purchaser’s perspective?
Yes, absolutely, as improperly drafted white papers can increase the risk of legal action against the company, as well as negative media coverage, or result in the need for cross border jurisdictional analysis. For Purchasers, white papers are of particular relevance as they describe the technology into which you are buying.
How much will it cost?
Because each ICO, and each Purchaser’s expectations, are unique, and the services/advice required therefore varies, get in touch with us to discuss the ICO so that we can give you a bespoke estimate of our fees.
When should the ICO retain a lawyer?
The earlier the better, in order to avoid making commercial or other decisions which do not comply with the relevant legal and regulatory framework. ICOs frequently run into road blocks with their white paper, or insufficient disclosures in the fund raising documents.
Why should the ICO Purchase engage a lawyer?
According to the FCA: “ICOs are very high-risk, speculative investments. You should be conscious of the risks involved … and fully research the specific project if you are thinking about buying digital tokens. You should only invest in an ICO project if you are an experienced investor, confident in the quality of the ICO project itself (e.g. business plan, technology, people involved) and prepared to lose your entire stake.”
Properly conducted due diligence and analysis of the ICO is the surest way to mitigate these risks. Every investment has a certain risk component, the goal is to make an educated decision on whether to proceed based on detailed advice from your lawyer.
My ICO is not based in the UK, I do not intend to target UK investors, I am not a Purchaser that is based in the UK, why should I hire you?
Our clients are international, but what unites them are their high expectations for the quality of advice they expect to receive. We are highly professional, and knowledgeable transactional lawyers. We are a young, dynamic and highly capable team, and have experience with servicing clients in all the different time zones, and jurisdictions. Fortunately, in the age of a digitised economy, all of our services can be conducted, and delivered online.
Can I pay using cryptocurrency?
Yes, we can accept payment in the form of established cryptocurrency with the exact amount depending on the current market rate.
Please contact us.