Blockchain law
"The Blockchain Act has created legal certainty with regard to many of the processes surrounding the Blockchain. Trading platforms with a license to trade financial instruments can also benefit from an EU passport."
Stephan Ochsner
Digitisation has already fundamentally changed many traditional business models and processes within the financial sector. In addition, the diverse applications of crypto currencies and block-chain technology will have further far-reaching effects on the entire industry.
With the "Blockchain Act" (Token and TT Service Provider Act - TVGT), which came into force on 1.1.2020, Liechtenstein has created legal security for this relatively new technology and thus an attractive environment for crypto companies in Liechtenstein.
Other services
Contact us
With the Blockchain Act, new business models and corresponding "TT service providers" have also been created, which must register with the Financial Market Authority and are generally subject to due diligence legislation. The following functions are considered TT service providers:
- "token issuer": a person who publicly offers tokens in his own name or in the name of a principal
- "token generator": a person who generates one or more tokens
- "TT key depositary": a person who holds TT keys in safe custody for principals
- TT token depositary": a person who keeps tokens in the name of another person for the account of another person
- TT protector" means a person who holds tokens on TT systems in his own name for account of others
- "physical validator" means a person who ensures the contractual enforcement of rights to property represented in tokens as defined by property law on TT systems
- "TT exchange service provider" means a person who exchanges legal tender for tokens and vice versa and tokens for tokens
- "TT verifying authority" means a person who verifies the legal capacity and the conditions for the disposal of a token
- "TT price service provider" means a person who provides users of TT systems with aggregated price information on the basis of offers to buy and sell or completed transactions; and
- "TT identity service provider" means a person who identifies the owner of a token and records it in a directory
Certain TT service providers are also subject to the Due Diligence Act as part of the prevention of money laundering. The following table contains the most important business models and compares the subjecting to the Due Diligence Act with the legal situation according to FATF standards, the 5th Money Laundering Directive (AMLD) and Switzerland. However, not all service providers from the crypto-currency sector subject to supervision are listed.
Provider |
FATF |
5th AMLD |
CH |
LI |
Custodian Wallet Provider |
Yes |
Yes |
Yes |
Yes |
Non-Custodian Wallet Provider |
No |
No |
No |
No |
Central trading platform |
Yes |
Yes |
Yes |
Yes |
Decentral trading platform |
Rather Yes |
Rather no and if so, |
Yes |
Yes |
"Blackboard" |
No |
No |
No |
No |
Online exchange office |
Yes |
not for crypto-crypto exchange |
Yes |
Yes |
ICO |
Yes |
No |
For payment token |
Yes |
Business models in the field of cryptocurrencies are often characterized by the establishment of business relationships without personal contact and the processing of transactions with low amounts. Liechtenstein's due diligence law has found suitable solutions for these particularities. The FMA Guidelines 2019/7, for example, provide for identification possibilities without a personal visit, such as video and remote identification. In contrast to video identification, remote identification does not require a person to be on the other side of the medium. This reduces the costs of the identification process. The FMA Guidelines 2018/7 contain a special chapter on TT service providers. Central to this are the explanations on the business profile, which contain a pragmatic approach to transactions with low amounts.
We offer comprehensive services in the areas of Fintech, Crypto-Currencies and Blockchain and support your innovative financial company in its digital transformation. We support you on the one hand in evaluating the opportunities of these new business models, but also in implementing regulatory requirements.
Our services include
- Analysis of planned business models and determination of the type of registration required as TT service provider
- Assessing whether a specific business model requires a license under the Banking Act, the Asset Management Act or the E-Money Act
- Adaptation of business models to the requirements of a specific category of TT service providers
- Development of efficient business processes
- Support in the implementation of regulatory requirements, in particular an appropriate governance, risk and compliance organization
- Development of a due diligence concept that is as automated as possible