On 1 March 2020, the regulations on the simple stock company (PSA) will come into force. They will make it possible to keep a register of shareholders of such companies using blockchain technology. For some, this is a minor technical regulation, while for others it is a truly revolutionary breakthrough in the legal system, enabling tokenisation of shares in Polish companies. How will it really be?
In the summer of 2018, we had the opportunity to participate in the analysis of the draft PSA regulations by the Coalition for Polish Innovation. The provision on the possibility of maintaining a PSA’s register of shareholders using a dispersed and decentralised database was unexpectedly included in the draft and immediately met with considerable interest. It was a complete novelty in the Polish legal system. The surprise was all the greater as, at the same time, we observed the first activities of regulators aimed at limiting uncontrolled development of blockchain technology.
The provision allowing a register of PSA shareholders to be maintained on blockchain is not as revolutionary as it seems. We are a long way from full tokenisation and decentralisation of PSAs. This is determined by other PSA provisions showing much more attachment to traditional legal institutions. Nevertheless, this provision opens up a lot of new possibilities and creates space for interesting legal experimentation with blockchain technology. It is worth taking advantage of this opportunity to create solutions that in the future will encourage regulators and lawmakers to open up the legal system more courageously to the technology of decentralised registers.
Continue reading “Can PSA shares be tokenised?”
At the end of September 2019, Rahim Blak published the response issued to him by the Office of the Polish Financial Supervision Authority (UKNF) to questions concerning the possible application of financial regulations to his planned and realised activity involving raising capital through distribution on the market of personal tokens. Although the response was issued in a specific case submitted to the Innovation Hub, given the lack of a public general position of KNF on the legal status of tokens, the document is also relevant to the broader market.
Continue reading “The legal status of tokens on blockchain: A few thoughts on new findings by UKNF”
The Principality of Liechtenstein will become one of the first countries with its own act on trusted technologies, approved by the Liechtenstein parliament at the first reading on 6 June 2019.
As reported by local newspapers Volksblatt and Liechtensteiner Vaterland, the parliament of this small Alpine state approved a new act on trusted technologies, and Prime Minister Adrian Hasler and his team thus achieved their aim. For nearly two years the government of Liechtenstein has been working on ensuring that the country becomes a global pioneer in blockchain technologies.
Continue reading “Clear path for trusted technologies in Liechtenstein”
Recently counsel, arbitrators and potential parties to proceedings have been examining with interest attempts to streamline arbitration using blockchain technology. We mentioned this in our 2018 report for Rzeczpospolita (in Polish), but in the industry so much is happening around “blockchain arbitration” that the issue deserves more attention.
Currently there are at least ten projects around the world, at various phases of realisation, using blockchain to automate alternative dispute resolution at least to some degree. There isn’t room here to describe them all in detail, but Kleros, CodeLegit (discussed also in our earlier publication), Juris and Oath seem particularly noteworthy. We examined what problems they may entail from a legal perspective. All of the comments below are based on publicly accessible materials (such as project websites and whitepapers), but are limited as these projects have not yet been thoroughly tested by end users (tests of beta versions are underway for some of them).
Continue reading ““On-chain” and “off-chain” arbitration: Using smart contracts to amicably resolve disputes”
An interview with Daniel Bigos, Gabriel Dymowski, Marcin Lorenc and Piotr Żelazko, members of the DoxyChain team (formerly DigiDocs), which took second place in the Polish phase of the Global Legal Hackathon.
Justyna Zandberg-Malec: Your project took second place in the Global Legal Hackathon. What is your solution all about?
Marcin Lorenc: We proposed basing powers of attorney for litigation, and in the future also other documents, on the secure blockchain technology. Using our application, which we are now perfecting, it will be possible to appoint or dismiss an attorney, as well as manage the circulation of powers of attorney and access the history of operations. The principal will know where his authorisation was used and who is the actual attorney in the given case. Lawyers in Poland use the right of substitution, passing on the representation of the principal to a colleague, which means that the principal doesn’t always know for sure who is actually representing him. In turn, the attorney may not remember all the cases where he was appointed to represent the client. Our solution comprehensively resolves the problem of such documents.
Continue reading “Powers of attorney (and more) on blockchain”
The discussion about the legal status of tokens and, in particular, whether and when a token is a security or other financial instrument, is still gaining momentum. There are more and more proposals around this discussion that resolve this issue at the outset, recognising that tokens are intended to become securities. These are so-called security tokens, and the issues are sometimes called security token offerings (STOs).
Continue reading “Security tokens”