STO/ICO legal services
By: Kirill Shilov
Tags: Security Token Offering, Regulation, Cryptocurrency, Blockchain, Legal

The market is currently shifting from ICO to STO and no one argues that ICOs allowed startups to open their doors to non-accredited, mainstreet investors, which was great. On the more negative side, however, those investors were completely unprotected against scammers and extraordinarily weak projects. There is now only a small share of ICO projects that are still alive or have any chance at earning some money for the contributors (who considered themselves as investors).

Ongoing changes are inevitable. STOs just add some much needed control over project team actions and compliance monitoring to the advantages that ICOs bring. But investors’ sense of security and confidence come with more complex legal procedures.

We asked lawyers from around the world if there’s a need to dramatize STO complexity, so we made a thread of articles on the subject.

GeekForge Experts answer:

The United States

Nathan Mubasher, a member of the State Bar of California who is admitted to practice before all state and federal courts in California.

“Other projects, like Knowbella and devFreight, are trying to operate compliant STOs, but we have yet to see a project operate an ICO fully under Regulation A+. Working with the SEC simply takes too long and places high hurdles in front of young startups.” (Read full version here)

Germany

Lutz Auffenberg, LL.M.,German attorney at law and founder of the Frankfurt-based boutique law firm FIN LAW.

“The SAFT Agreement, for example, is not explicitly drafted in accordance with German law but rather American law. Therefore, I always strongly advise to draft a new tailor-made document that meets the peculiarities of German private and regulatory law rather than using a SAFT template or something similar.” (Read full version here)

Israel

Ran Hammer, General Counsel at Orbs Group.

Mattan Erder, Regulatory Compliance Strategist at Orbs Group.

“Israel provides favorable tax breaks to technology companies that meet certain qualifications. In its most recent tax circular, the Israel Tax Authority expressly stated that ICO companies who otherwise meet the definitions are eligible for these benefits.” (Read full version here)

Canada

Chetan Phull, the founder of Smartblock Law Professional Corporation.

“To date, there has been no actual enforcement action against the use of cryptocurrency as ‘money’ in Canada — not even against the Calgary Digital Dollar, where enforcement would be supported by long-standing precedent of the Supreme Court of Canada.” (Read full version here)

Russia

Victoria Rogova, Managing Partner at Lex Futurus Group, LLC, an international boutique law firm.

“Although the start of BioCoin was very promising, it would be fair to say that now the project and its partners adopted a wait-and-see attitude with regards to development of the project in the absence of ICO-related legislation.” (Read full version here)

Brazil

Henrique Marcos & Yure Lira, Crypto/Blockchain Lawyers at CY2LAW.

“However, as soon as the people behind the project announced that they would be organizing an ICO, the Brazilian securities regulator, the CVM, started to ask even more questions through subpoenas.” (Read full version here)

Australia

Ravi Nayyar, blockchain legal expert.

“If the ST is not a financial product, they have a range of potential liability for breaches of the Australian consumer law, which prohibits misleading or deceptive conduct in relation to the token.” (Read full version here)

Please keep in mind that nothing herein constitutes legal advice. All information contained within this article and in the linked articles is for informational or educational purposes only.

By the way, there will be an opportunity for you to share your own thoughts on the subject and your professional experience with our audience.