The regulatory landscape.
WHY IT IS FRAGMENTED
Assets cross borders while regulation does not, and jurisdictions have taken differing approaches.
WHAT THE APPROACHES RANGE ACROSS
Comprehensive frameworks Application of existing securities and payments law Restriction of specific activities Prohibition
WHAT REGULATORS GENERALLY FOCUS ON
Consumer protection Financial crime prevention Market integrity Financial stability Taxation
WHAT DETERMINES HOW AN ASSET IS TREATED
Its characteristics and how it is offered, rather than what it is called.
WHY THAT MATTERS
Calling something a utility token does not determine its classification.
WHAT TESTS TYPICALLY EXAMINE
Whether purchasers expect profit from others' efforts Whether funds are pooled What rights are conferred
WHAT SERVICE PROVIDERS TYPICALLY FACE
Registration or licensing Customer verification obligations Transaction monitoring Reporting
WHAT TRAVEL RULE REQUIREMENTS INVOLVE
Transmitting originator and beneficiary information with transfers above thresholds.
WHAT THAT AFFECTS
Exchanges and service providers, not individuals directly.
WHAT TO ESTABLISH FOR ANY ACTIVITY
Which regulated activity, if any, you are conducting.
WHAT TO NEVER DO
Assume that operating online places you outside regulation.
WHAT TO OBTAIN
Legal advice specific to your activity and jurisdiction.
