Capital Markets Law

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Security Token Offering →

One focus of the advisory services of FIN LAW is capital markets and securities law. FIN LAW not only advises and supports its clients with the planning, conception and implementation of classic security issues. It also provides its clients with legal advice regarding innovative technologies and investment options such as initial coin offerings (ICO), utility token sales (UTS) and security token sales (STO). In this field, FIN LAW is able to offer outstanding professional expertise to its clients and actively forms and develops the legal framework in Germany through the counseling and judicial representation of projects as well as the publication of scientific papers.  

Initial Coin Offerings and Token Sales

Blockchain technology is not only suited to create alternative means of payment such as Bitcoin, Litecoin, Monero, Dash or IOTA. Following the well-known practice of the initial public offering (IPO), since 2013 a lot of Blockchain projects where funded through the selling of created Blockchain units to early investors. The crypto projects EOS, IOTA and for example TRON where funded through token sales, EOS being the most successful ICO of all times with a sales volume equivalent to approximately 4.1 billion USD.  ICOss and especially STOs are interesting methods for startups to procure funds for their business. Because of the fact that the execution of a security token offer is a digital form of a capital market issue, German regulations regarding the offering of securities are in effect. FIN LAW accompanies its clients from the fundamental decision between an ICO or STO to the detailed legal design of the token and handles the necessary regulatory clarifications with BaFin and other competent authorities as well as the creation and compilation of any necessary legal documents, especially any prospectus in accordance with the Federal Securities Prospectus Act or the Federal Financial Products Sales Prospectus Act and represents the client vis-à-vis BaFin throughout the approval process.

Drafting of a Securities Prospectus

In case a company wants to publicly offer securities, stock options, participating certificates or equity derivatives in Germany it has to provide a prospectus prior to the issuing which meets the requirements of the Federal Securities Prospectus Act (WpPG) and the EU Prospectus Directive which itself has to be approved by BaFin. The prospectus has to include, detailed information regarding the issuer and the security itself as well as a comprehensive listing of all the risks associated to the security. FIN LAW supports its clients with the creation of such prospectus and represents them during the approval process vis-à-vis BaFin.