STO-special: tokens in German Supervisory law

the Token will be an increasingly important part of corporate financing in Germany. This course was built in the last year on the Initial Coin Offerings (ICO), while their sub-category, the so-called Security Token Offerings (STO) in the foreground. The Name stems from the fact that most of the tokens represent rights to companies, and thereby under the securities terms.

By Michael Kissler
14. April 2019BTC$5.071,43 0.01%part Facebook Twitter LinkedIn xing mail

This also led to a change of perspective within the Bitcoin scene. After the Token market to 2018 boomed, did not come true, the hopes of many crypto-Disciples, unregulated Token Offerings in Bulk.

New is that the industry is trying to circumvent the legal rules and regulations in General, but as a Chance to understand what is in view of the variety of Scams and the significant reputational damage within the last two years is not surprising.

STO & "ICO": Token, Design and law

Meanwhile, most of the crypto-friends aware of the fact that the questions of law to ICOs and STOs are of Central importance to the company and the Token model. Finally, the regulatory requirements depend on the technical design of the Token. German law consists of a variety of laws. To add to this paragraph the jungle of EU regulations, which can also be found in Germany. However, have already formed out of a number of key legal issues for almost every Token Offering is crucial.

What are the rules there are so that should help the still grey Token market to more transparency, investor protection and, finally, a General acceptance on the capital market? Or to formulate it with Jacob Grimm: "What but the most precious rights that you can't have a hand to help?"

Permission required

it is Crucial, in particular, whether the Token-sale permit is required. This is just for Start-ups is relevant, in particular if you do not have any strong financing back. Because to apply for a license is time - and thus cost-intensive.

A permission, a duty may arise from the fact that tokens are classified as financial instruments, securities, or assets, or E-money, and thus, under the Regulations of the German banking act (KWG), the securities prospectus act (WpPG) or the capital investment act (capital investment act) or the payment services act (ZAG).

for Regulatory purposes is also relevant to the mechanisms for money laundering prevention. This means, in particular, the regulations on customer identification, the so-called "Know Your Customer" (KYC). The procedure for the identification of the customer may be for Token-provider to be relevant, if they fall under the application area, thus under section 2 of the money laundering act (Amla). Through the KYC procedures of the company to verify your customers. So you can check if this Person transactions may be made. The method includes also, where the crypto-money, which the customer would like to bring.

The sharp sword of the BaFin

Tough it is then, if the BaFin intervenes and their Rights. Permission will be made subject to transactions in the field of prudential Supervision of the BaFin without permission, can you say the shops under. Moreover, you can force the company to shift the money to repay. This sensitive fines. A risky Cocktail that can destroy a company.

Not to be under the personal risk, the responsible expose. Because a criminal prosecution is possible, and such methods are for the accused because of the reputation damage and the actual penalty is anything other than pleasant.

Away from the penalties by the state can lead to various violations of the Law in the relevant areas also to civil liability. This means that you can make a claim for compensation.

at the same time the BaFin in the area is very active and observed those that give out tokens very carefully. Already in 2017, the BaFin has initiated in 13 cases and proceedings against the publisher of the Token. This is due to the fact that the suspicion of unauthorised shops in the area. In four cases, the transactions were prohibited and the public Prosecutor's office turned on.

False dawn

For the layperson in that respect may be confusing that the Berlin court of appeal on 25. September 2018 ruled that Bitcoin are not units of account and, therefore, no financial instruments and thus not subject to the Permit requirement. For one thing, the criminal is not a judgment, neither the BaFin nor to other courts (except the court of appeal in criminal cases, lower courts in Berlin). The other Bitcoin not with ICOs and STOs compare that company.

Therefore, the criminal judgment of the superior court must not be understood as a free pass for permit-free Token Offerings miss.

Neither rash nor fearful

For Start-ups that want to issue tokens, applies in relation to regulatory requirements of the old act is neither rash nor timid. For those who approach too careless on the subject, will understand the words of the Polish poet Stanisław Jerzy Lec, who said that "the paragraph mark alone, [ ... ] like a torture tool" look. With good planning and informed implementation of the supervision can be legal hurdles, however, and Token-based rounds of financing. Because the BaFin has an interest in a financially strong Germany as a business location and a good working relationship with appropriate handling, in principle, possible.

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