blockchain - legal aspects of new technologies

The Lex Mundi working group for blockchain has prepared a Global Token Sales Guide summarising the different regulatory regimes for ICOs (initial coin offerings) in key jurisdictions around the world. Wardyński & Partners authored the section on Poland.

On many occasions we have predicted that cryptocurrencies will soon become subject to Anti Money Laundering and Countering Financing of Terrorism (AML/CFT) regulations.

This became clear in July 2016 when the European Commission announced that it will impose new regulations and presented its proposed changes. (Coming soon: A legal definition of virtual currencies).

In our 2014 Virtual currency report we analysed the anticipated impact of the potential regulations on the cryptocurrency market and discussed the subject again in 2015’s  Bitcoin and money-laundering regulations article. We have also brought attention to the subject during industry conferences and meetups.

Currently, legislative work on these regulations is nearing the end, both at the EU-level and in Poland. Below, we take a look at what the nearly-ready rules will contain and their practical impact.

As we discuss in another article, legislation extending the coverage of anti-money laundering/combating financing of terrorism (AML/CFT) regulations to include cryptocurrencies is already at an advanced stage in Poland and at the EU level.

Two simultaneously published articles discuss soon to be proposed rules for applying Anti Money Laundering and Countering Financing of Terrorism (AML/CFT) regulations to cryptocurrencies (and potentially tokens). The first article describes key changes expected in the proposal, the second analyses the proposed new definition of ‘virtual currency’ and its anticipated practical impact.

While the market is captivated by initial coin offerings as they continue to attract dizzying returns on invested capital, the capabilities of blockchain technology reach much further. Indeed, some blockchain solutions currently in development or already available throw into question the sense of existing financial regulations.

We have written about initial coin offerings several times, both here on the blog and in our 2016 report on blockchain, smart contracts and DAO. ICOs continue to grow at an impressive rate, with projects raising funding of several billion dollars through ICOs in 2017.