DLA Piper has completed a global compliance survey of initial coin offerings (ICOs) and securities token offerings (STOs), identifying how governments and agencies in more than 70 jurisdictions define, regulate and tax tokens and associated transactions. Regulatory concerns, the survey shows, can range from an outright ban on ICOs and STOs (or any token generation event) to whether such offerings will be permitted, and if safeguards and regulatory compliance issues are properly addressed.
DLA Piper's findings underscore the need to involve legal teams early in an offering, alongside technology and corporate advisers, because the approach taken by regulators differs widely from jurisdiction to jurisdiction.
"This is critical for anyone interested in cross-border or global offerings of cryptocurrency – issuers have to not only comply with their home country requirements, but also the rules of every jurisdiction in which they offer or sell cryptocurrency," said Curtis Mo, a partner in DLA Piper's Silicon Valley office and one of the architects of the survey.
"Digital asset formation is providing a new and exciting approach to capital raising creating opportunities for startup and mature companies to access global capital pools through new products and financial instruments wherever they may be. This requires a detailed understanding of regulatory frameworks across multiple countries which DLA Piper is uniquely able to provide through its global network," said Martin Bartlam, co-chair of DLA Piper's global Fintech practice.
To discuss the findings and how we can support global offerings, please email us at [email protected].
DLA Piper's global blockchain and digital assets group offers strategic regulatory and transactional guidance to companies in nearly every sector, among them: Internet and social media companies building content databases; banking, insurance and other financial services companies reducing transaction processing times; healthcare companies using tokens to secure medical records; and agricultural and industrial companies improving their supply chain logistics solutions. And we assist companies at every stage of the business life cycle, from early-stage startups raising funds through blockchain-enabled means to commercial institutions operating at the intersection of finance and technology.
Our cross-practice platform leverages the collective experience of lawyers from our corporate, securities, tax, IP, litigation, regulatory and other practices to help clients across all sectors navigate the evolving legal landscape. We regularly advise on issues relating to:
- Initial coin offerings, token generation events, security token offerings and similar blockchain-enabled methods of raising funds
- Anti-money laundering, sanctions and similar regulations
- Money transmission, currency conversion and similar money services issues, including KYC requirements
- Commodities issues created by certain token models
- Tax considerations, including international structures and tax rationalization
- Intellectual property protections, including open source matters, smart contracts and IP transfers and management
- Regulatory enforcement by the SEC and other international regulatory bodies
- Worldwide data protection compliance and cybersecurity matters