CRYPTO CURRENCIES & INITIAL COIN OFFERINGS LEGAL STATUS QUO - - PowerPoint PPT Presentation

CRYPTO CURRENCIES & INITIAL COIN OFFERINGS LEGAL STATUS QUO

• #1: legal character – definition
• #2: legal protection for players
• #3: interdisciplinary research
• #4: regulatory model
• #5: legal qualification of coins and token
• #6: ICOs / regulatory framework

• are cryptocurrencies currencies?
• functional approach
• source-related approach
• structural characteristics
• private origin

• NO MONEY, NO E-MONEY, NO OFFICIAL MEANS OF PAYMENT
• no governmental emission
• produced by “mining“
• production process
• digital asset – digital product

• Definition ECJ:

“vir irtual l currency Bitcoin has no purpose other than to be a means of payment” and “is accepted by specific economic operators”

• not useful – misleading

“a dig igital representation of value that is neither issued by a central bank

• r a public authority, nor necessarily attached to a fia

iat currency, but is accepted by natural or legal persons as a means of payment and can be transferred, stored or traded electronically” + private origin, tradeability

• concept as a means of payment not appropriate

• “virtual currencies' means a digital representation of value that is

neither issued by a central bank or a public authority, nor attached to a le legally established currency, which does not possess the le legal status of currency or money, but is accepted by natural or legal persons as a means of exchange or for other purposes, and can be transferred, stored

• r traded electronically”

++ no currency in a legal sense, no money, no means of payment  means of exchange

• private asset – private autonomy
• EU-wide protection by the fundamental

l rig ight to property

• restrictions must be appropriate, proportionate and the

most moderate means

• protection of legitimate expectation (high investments)!

• character of goods fulfilled (no currency or money,

but means of exchange)

• free movement of goods
• only restrictions if there are «mandatory requirements»

 e.g., potential restrictions of freedom of capital (e.g., Cyprus ‘12, Greece ‘15) not applicable

• research platform
• interdisciplinary research (law, IT, finance, companies)
• identification of legal framework
• development of new regulatory approach
• bottom-up-approach / best practices

14/11/2017 SmartBlockchain.at 11

Smart Law Smart Tax Smart Technology Smart Finance

These renowned people contributed to the agenda:

Bundle led Expert rtis ise in in: Expert rts support rt the s smartblo lockchain in in init itia iativ ive

14/11/2017 SmartBlockchain.at 12

• methods
• interdisciplinary collaboration among key players
• creative potential due to lack of bureaucratic burdens
• scientific focus guarantees objectivity and independence
• targets
• specific concepts
• smart regulation

• smart regulation!
• smart, modest and only the necessary minimum
• boost of innovation potential
• important contribution of Austria for the EU Council

Presidency 2018

Rights associated? No (Coin) Yes (Token) Voucher Security

• small issuings (max 1.5m Euro): subordinated loans
• insolvency of issuers – high risk investment
• public offerings – obligation to publish a prospectus
• prospectus approval

• new form of enterprise and project financing
• offering of new coin or token for sale or exchange for other coins
• collected funds are used for company’s own business
• participation motivated by expectation of price increase

• 3 models
• Issuing of coin – ecosystem model (no rights)

Consumer Rights Directive (information obligations)

• Issuing of token – voucher model

same requirements

• Issuing of token – security model

Prospectus Directive (information obligations)

• current situation: subordinated loans – little protection of investors
• heavy losses in an insolvency situation
• ICO: (arguably) fairer solution for all parties
• value of coins may remain even if issuer is insolvent
• coin remains even if company ceases to exist

 a new way of funding?

Too complicated?  www.ico-you-can.com Provides first legal classification (Austrian law)