Liechtenstein’s Blockchain Act makes the legal landscape easier for blockchain firms, but it’s still not easy. Businesses that want to issue a token or operate in Liechtenstein should consult a specialized lawyer. Better be safe than sorry.
One reason blockchain firms and investors come to Liechtenstein is the so-called “Blockchain Law,” which is actually called the “Token and Trusted Technology Service Provider Act, “but that’s too long for anybody to pronounce.
Since the act came into force in January 2020, Liechtenstein has created legal certainty as it now regulates and clarifies many legal issues and challenges around the token economy that other jurisdictions don’t. With this law, Liechtenstein has positioned itself as an innovative and legally secure location for providers in the token economy.
But that doesn’t mean navigating the legal landscape is easy.
Specialized blockchain law firms in Liechtenstein
Several specialized law firms in Liechtenstein offer services in the blockchain ecosystem. They support token issuances, business licensing, investment management, prospectuses, and everything that requires knowledge of the legal particularities and an understanding of blockchain technology.
One of the most prominent law firms is Naegele, attorneys at law. Founding Partner and Managing Director Thomas Naegele was a member of the government workgroup drafting the Blockchain Act and one of the first lawyers in Liechtenstein to focus on blockchain technology. His firm has consulted various clients on blockchain business in Liechtenstein, and he is regularly featured in leading publications and newspapers.
Another specialized blockchain lawyer in Liechtenstein is Florian Scheiber, who has also been accompanying companies for years, especially in the context of so-called security token offerings (STOs). Those are token issuances governed by securities law, meaning certain legal requirements have to be met.
European and national experience
When choosing a lawyer in the blockchain space, it’s key to find someone who also understands the technology. Also, depending on what exactly the purpose of the business is, it might be important to have someone who is not only knowledgeably in Liechtenstein law but also in European law.
As Liechtenstein is a member of the European Economic Area (EEA), many European financial markets laws also apply in Liechtenstein. Moreover, if token issuances are passported to a European country, it is paramount to have a lawyer that understands European law and the domestic law of that particular country.
Liechtenstein-based law firms such as Naegele or Scheiber have experience with such matters, as they have accompanied many issuers in the past with security token offerings.
Will STOs pick up the pace again?
This autumn, the first exchange for security tokens is expected to open in Switzerland. What changes is that from then on, there will be not only a primary but also a secondary market for security tokens. So far, most crypto exchanges have only listed utility tokens.
That might make Security Token Offerings more attractive to both issuers and investors. They are an alternative, especially for smaller companies that don’t have the financial resources to conduct a traditional IPO.
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