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ICO Legal Services

What kind of legal services ICOs might need?

Most countries want to regulate ICOs in order to reduce the amount of money laundering, or other criminal, activities that are carried out via ICOs and cryptocurrencies. Moreover, most countries view the volatility and high-risks of cryptocurrencies as problematic. Therefore, it is reassuring that regulation is coming to the world of cryptocurrency and ICO, to limit ICO scams and encourage innovation. ICO’s can do the same as IPOs did for reinventing the global economy centuries ago as long as the ICO system is regulated.

  • Problems and risks

Regulations of ICOs can be effectively characterized by different features such as:

  • Lack of specific judicial practices.
  • With legal requirements, the technical components of a project must comply.
  • Detailed compilation and elaboration of project documentation.
  • The absence of a constant legal mechanism of regulation.
  • Problems with opening a bank account for an ICO and blockchain project.
  • Type of activity, turnover of ICO project, selection of a jurisdiction.

Documentation of the ICO project

When drafting documents for a project, the following features should be considered.

  1. Terms and conditions (T&Cs)

  • T&Cs posted on a website is an agreement in the form of a browse-wrap contract.
  • Inform users about T&Cs and avoid using browse-wrap agreements.
  • It is also recommended to specify that sale involves high risk.
  • Citizens of certain jurisdictions in the ICO must be indicated in the T&Cs.
  • The place of dispute resolution and the applicable law must be indicated in the T&C.
  • Prohibition of participation of incompetent and under-age persons must be indicated in the T&C.
  • With the text of an agreement and a button for agreeing with the conditions, the company needs to use click-wrap agreements in T&Cs by systematically implementing a pop-up window.

ICO legal

  1. White paper

  • Companies to avoid mentioning or comparing ICO and blockchain technology in the white paper with investments, issues of any currency or securities, and distribution of profits unless, token precisely is considered as securities token.
  • The white paper of the ICO must be unambiguous in its content, which determines the range of persons to whom a service is offered and if some nationalities are prohibited to invest that project.
  • The white paper does not provide vital information on guarantees to service users such as bank guarantee, escrow, etc.
  1. AML/KYC

The AML/KYC will need to have jurisdiction of the incorporation of a company for ICOs, AML (anti-money laundering), applicable law to an agreement, verifying the identity of a user is required, subject to regulation on the processing of personal data.

ICO regulations worldwide

Startups that plan to launch an ICO have to be aware of differences in the regulation of ICOs and cryptocurrencies across the world. Although cryptocurrency and ICO projects move across borders, regulations do not. So, it is very likely that some countries won’t be able to participate in the ICO.

The United States of America

ICOs are allowed in the USA but they are regulated. The rules regarding the ICO vary widely from state to state in the USA. The US government expect ICO’s to be registered with the Securities and Exchange Commission (SEC) especially if the tokens are securities. It is essential to understand that most ICOs are seen by the SEC as securities (which is not at all true). The SEC had voiced their concerns about the lack of investor protection as compared to traditional securities markets.

The European Union

The EU currently allows investors to participate in ICOs (such as IryoCloudmoolahBunny Token and more) if the offering complies with the AML/KYC policies. The ICOs should also adhere to required business regulations and licenses. The European Securities and Market Authority (ESMA) views token sale as high-risk events.


ICOs are allowed in Russia at the moment but they are highly unregulated. Five announcements have recently been issued by Russia that make it difficult to raise funds through ICO.

The United Kingdom

The government of the United Kingdom has issued warnings to their citizens about the dangers of participating in ICOs. However, the UK is yet to issue regulations or prosecute anybody. ICO operators in the UK are free to interpret existing laws and regulations as they see fit for their own properties. The UK is testing ICOs and new regulations may be released soon.


ICOs are allowed in Singapore but are subject to future regulations. The monetary authority of Singapore offers a guide on digital token offerings. It indicates how cryptocurrency should be treated under current laws.


Security laws in Canada will be applied to any token sale that can be efficiently categorized as financial security. Canada has also developed a policy for regulating ICO projects that cannot be fitted into their national regulatory scheme.


Australia is one of the first countries to formally launch ICO regulations. The Australian Securities and Investment Commission (ASIC) issued regulatory guidance for newly-formed businesses that want to launch an ICO. The enormous potential of ICOs is recognized by the ASIC. Australian companies that want to raise money as part of an investment scheme by launching ICOs will face disclosure, registration and licensing obligations.


A new version of the Anti-Money Laundering Act and Terrorism Finance Act was enacted on 27th November 2017 in Estonia by its parliament. This new regulation effectively addressed many shortcomings of the previous version of the law. Some of the main highlights of the new version of the Anti-Money Laundering Act and Terrorism Finance Act (2017) are:

  1. It will contain a clear definition of cryptocurrencies and other virtual currencies.
  2. Hefty fines will be charged to companies for non-compliance with the new regulations.
  3. There will be an obligation for regulated companies to develop efficient and sound risk management policies while taking into consideration their risk appetites, capital and many other risk factors.
  4. It will also contain the possibility of delegating clients for cryptocurrency exchange, and storage service providers.
  5. The new regulations will contain remote identification of clients for cryptocurrency exchange and storage service providers.
  6. It will also contain regulations for the provision of cryptocurrency wallets.

Cayman Islands

The Cayman Islands are drafting regulations to enable cryptocurrency business ventures to register their ICOs with the government to avoid money laundering and ICO scams. Cayman Islands already follow global KYC/AML regulations. It will expel any company that doesn’t follow international laws.


Switzerland is rapidly establishing itself as the cryptocurrency capital of the world. The financial supervisors of Switzerland have announced guidelines that should help local ICOs. It hopes that the announcement of these guidelines will effectively support the ICO market in Switzerland.

In addition, it will boost the growth of blockchain technologies by systematically clarifying when entrepreneurs will have to apply securities and anti-money laundering laws. The guidelines should increase the number of ICOs in Switzerland. New cryptocurrency ventures will be encouraged by setting up Switzerland as a cryptocurrency-friendly country.


Regarding the potential risks of ICO investments and ICO scams, the Federal Financial Supervisory Authority of Germany has issued a warning. Due to the lack of transparency rules of Germany, cryptocurrency investors are left on their own when it comes to verifying the identity, credit standing, and reputability of the ICO issuers.


ICO’s are allowed within Israel but subject to future regulations. The Israeli Securities Authority is scheduled to report on whether ICOs and cryptocurrency should be regulated. The government of Israel is warming up to the idea of ICO crowdfunding.

The Financial Services Agency of Israel is looking for regulations that may help to strengthen AML/KYC protection for cryptocurrency.


ICOs will be allowed in Japan but they will be subject to future regulations. The Financial Services Agency of Japan will be issuing an investor warning on ICOs.


The Thai regulator has agreed to enact separate laws on ICOs and cryptocurrencies. The government of Thailand will regulate the sale of cryptocurrencies and cryptocurrency businesses as well as their taxation.

Thailand welcomes the use of cryptocurrency and is yet to issue any policies or warnings on ICOs. The Securities and Exchange Commission of Thailand has released a statement paper to welcome the use of cryptocurrency but leaves open the possibility of regulating cryptocurrency considered to be securities.

Hong Kong

Hong Kong will crack down on cryptocurrency exchanges that violate local security laws and operate without a license. The Securities and Futures Commission (SFC) of Hong Kong has received complaints by investors that they were unable to withdraw cryptocurrencies from their wallets with some popular exchanges in Hong Kong.

The SFC of Hong Kong also received several complaints concerning ICOs, which alleged that they are unlicensed or are involved in fraudulent activities.


The primary securities regulators of the Philippines have confirmed work towards drafting regulations for ICOs and cryptocurrency transactions, to protect investors from ICO scams and other frauds. The outline of regulations that will effectively cover the registration and issuance of cryptocurrencies will be finalized in 2018. They feel that regulations addressing AML/KYC protections may also be needed.

Regulations of ICOs and cryptocurrency will introduce guidelines on the eligibility of the ICO issuers and the cybersecurity posture of cryptocurrency.


ICOs are unregulated in India at this time. The regulations of ICOs and cryptocurrencies are expected in the coming months. The government of India under its finance ministers recently announced that they do not recognize cryptocurrencies as a legal tender. Several Indian banks have suspended cryptocurrency exchange accounts as a crackdown on suspicious transactions.


China has taken several steps to curb cryptocurrency activity. It banned ICOs on September 2017 and also issued statements to local exchanges to stop trading in Bitcoin and other altcoins. It has also outlined several proposals to discourage cryptocurrency mining. Limiting the trading of cryptocurrency activities in China is a joint effort between the Ministry of Industry and Information Technology of China, the Central Bank of China, and the Cyberspace Administration.

Legal services to assist the companies planning to launch an ICO

We devote complete attention to the proper development of blockchain technology and cryptocurrency. Our team of qualified and skilled professionals will provide full legal support to different ICO projects including help with the following:

1 – Drafting of legal documents for companies launching ICOs

The drafting of legal documents is required by companies in order to provide a text of a public offer, which will be posted on the website of the project. General terms of a project, nondisclosure and other legal documents such as terms of use, privacy policy, token purchase agreement, and white paper essentials for investments will be drafted by qualified professionals. The ICO countdown has already begun for many tokens.

ICO launch

2 – Development of compliance measures for an ICO issuing company

  1. Legal firms will develop effective measures to reduce the risk of breaching the legislation on combating the legalization of money raised by the financing of terrorism or by any criminal means.
  2. ICO Legal firms will build measures to reduce the risk of recognising tokens as security in compliance with the applicable legislation.
  3. In accordance with the legislation of the ICO executing state, ICO legal firms will draft AML/KYC project policy.
  4. Measures for reducing risks of breach of the legislation will be developed by our team to combat illegal financial activity.

3 – Drafting investment agreements

ICO legal firms will draft investment agreements and other legal documents for start-ups for launching their ICOs (like SkyChainLendoABYSS) and raising funds for the further development of their project.

4 – Minimization of the risk

ICO legal firms prepare recommendations on preferred jurisdiction that will provide minimal legal requirements on disclosure of information about the finances and owners of the company that is planning an ICO sale in order to raise funds.

ICO legal firms also prepare and draft corporate structure in compliance with the existing regulations of controlled foreign company, and in compliance with the residence of the chief executive officer and the beneficial owners.

5 – Dispute litigation in cases involving ICO projects

In legal disputes related to ICOs, the interests of the clients in the court of law will be represented by skilled professionals in any jurisdiction. ICO legal firms offer the preferred applicable law and develop an arbitration clause for start-ups.

The legal framework for resolving conflicts

The structure of the business

When token holders or investors see a legal structure of the business, they will feel more secure and will be interested in investing money in the token sale campaign, knowing how to invest in ICOs. The investment in the ICO campaign will increase when ICO legal firms ensure that the businesses issuing the ICO will retain all their intellectual rights. Investors and token holders will be sure that there is no risk associated with the token sale when the company has a proper legal structure associated with it. It will also make the tokens issued by the company more valuable, which will attract more investors.

  • ICO legal firms will assist the company in attaining licenses to launch the ICO (if necessary, based on the jurisdictions).
  • ICO legal firms will assist them to ensure the compliance of the business with the applicable law in different countries and jurisdictions.
  • Based on the needs of our client, ICO legal firm will draft NDA and complete IP assignments.

ICO matters

  • Supported by a vast experience and knowledge of ICO, the qualified partners are delighted to help with legal services in relation to ICO projects such as:
  • Within the applicable law in particular jurisdiction, assist companies in ICO marketing and cryptocurrency tokens to the right audience.
  • Assist companies in building the legal structure of the token to be issued in the token sale.
  • Help the companies to establish proper communication with banks regarding fiat money.
  • Professionals will help start-ups and companies to effectively establish communication with regulatory authorities for the launch of their ICO and to raise funds which help in their ICO ratings.
  • Help companies to form long-term relationships with their investors/token holders.

Legal Documentation

Our partners are capable of preparing legal alliance for documentation related to the ICO. Based on the legal specifications, our partner can legally draft the white paper, token sale agreement, privacy policy, terms of use for the website, offering memorandum, disclosure, disclaimers, legal letter regarding the token, AML/KYC policy and regulatory documents.

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