When the Markets in Crypto Assets Regulation (MiCAR) comes into force on December 30, 2024, the provisions on crypto asset whitepapers contained therein will also become applicable. On this date, providers who publicly offer crypto assets other than asset referenced tokens or e-money Tokens must, among other things, prepare and publish a corresponding crypto asset whitepaper and submit it to BaFin as the competent authority in the event of a public offering in Germany. The information contained in the crypto whitepaper must not be incomplete, dishonest, incomprehensible or misleading. The regulations ultimately aim to ensure that the crypto whitepaper contains all the information necessary for the potential investor to make an informed purchase decision. But who would be liable should the crypto asset whitepaper be incorrect in the aforementioned sense?

In General, the Provider, the Applicant for Authorization to Trade or the Trading Platform Operator are Liable

Firstly, MiCAR stipulates that those who assume responsibility for the crypto-asset whitepaper are also the addressees of any liability for errors in the whitepaper in question. These are either the provider of the crypto asset or the person who has applied for the authorization of the crypto asset for trading or the operator of the trading platform on which the crypto asset is to be traded. Interestingly, the term “issuer” was not included in the scope of the liability addressees on the grounds that this would not be expedient, as there is often no identifiable issuer for this type of crypto asset. In principle, it is stipulated that all of the aforementioned possible responsible parties must be legal entities. As a general rule, they are only subject to limited liability insofar as they are only liable with their company assets. This limitation of liability would also affect liability for an erroneous crypto asset whitepaper, meaning that young companies with a thin capital base that assume responsibility for the whitepaper in question could only have very limited liability. In this respect, claims for damages due to losses caused by erroneous crypto asset whitepapers could well come to nothing.

Liability of Members of the Administration Bodies, Management Bodies or Supervisory Bodies

For this reason, MiCAR cumulatively also holds the administrative body, management body or supervisory body of the person responsible for the whitepaper liable to the holder of the crypto asset for damages suffered due to breaches of the aforementioned obligations. Specifically, this means that the natural persons in the aforementioned bodies of the legal entities may also be liable for damages caused by an erroneous crypto asset whitepaper. A limitation or even an exclusion of this liability by the general terms and conditions of the person responsible for the whitepaper is excluded by MiCAR itself. A proper and careful preparation of the required crypto asset whitepaper to avoid liability risks for the person responsible for the whitepaper by a law firm specializing in the preparation of MiCAR whitepapers is therefore advisable for all parties involved. This is particularly important as there is no time limit for this type of liability in MiCAR, which is otherwise usual for prospectus and documentation obligations.

Rechtsanwalt Dr. Konrad Uhink

I.  https://fin-law.de

E. info@fin-law.de

Zuständiger Anwalt für die Beratung zur Erstellung rechtskonformer MiCAR Whitepaper in unserer Kanzlei ist Rechtsanwalt Dr. Konrad Uhink.