It is of utmost importance for issuers of security tokens to know when they are legally allowed to start marketing their token sale. The European Prospectus Regulation and the German Security Prospectus Act allow marketing activities prior to the approval of the prospectus as long as certain obligations for the protection of investors are observed.
Already since the beginning of the legislative process of introducing crypto custodian services into the German Banking Act (KWG) it was uncertain if these new financial service providers could safeguard security tokens, meaning digital securities, for their customers. BaFin finally answered that question in its new leaflet.
More and more tokenization projects for investment purposes are realized, but this does not always have to happen in the form of tokenized participation rights. In today’s blog article, FIN LAW comes up with an overview of the current possibilities for the tokenization of financial instruments.
The collection of funds at the capital markets via bonds can profit from a legal exemption that excludes the qualification of the collection as the banking activity of deposit business. But is this exemption also applicable to tokenized bonds?
Asset investments in accordance to the German Asset Investment Act become less and less common due to the comparable regulatory requirements with regards to securities. Tokenization could bring new life to this product class. A summary of possible advantages of tokenized asset investments.
As of next year, the crypto custody service will be introduced in Germany as a new form of financial service that is subject to an authorization requirement. One of the key questions for future crypto custodians will be “what are the regulatory requirements that have to be fulfilled in order to obtain the mandatory BaFin authorization?” The second part of our multi-part blog “Let’s Build a Crypto Custodian” tackles the question of the required minimum starting capital.
The harmonization of the capital markets enables European security emitters to offer their securities EEA-wide as long as they conduct a notification procedure. This is due to the EU Prospectus Directive. But can this advantage be transferred to security token offerings?