On 28 August 2018, the Ministry for General Government Affairs and Finance of Liechtenstein published the consultation report on the new Blockchain Act. The new law aims to strengthen the legal certainty for users and service providers in order to further promote the positive development of the "token economy" in Liechtenstein.
On 28 August 2018, the Ministry for General Government Affairs and Finance of Liechtenstein published the consultation report on the new Blockchain Act (Act on Transaction Systems based on Trustworthy Technologies (VT) (Blockchain Act; VT Act; VTG)).
With the new law, the government of Liechtenstein recognizes the great potential of blockchain technology for the economy, especially for financial service providers based in Liechtenstein. The new law aims to strengthen the legal certainty for users and service providers in order to further promote the positive development of the "token economy" in Liechtenstein and, at the same time, to protect the reputation of the country.
The government has decided to regulate not only the current Blockchain-applications (in particular cryptocurrencies and initial coin offerings (ICOs)), but also to establish a legal basis for the entire scope of application of the token economy according to a long-term approach, which should also meet the needs of future generations.
In summary, the draft Blockchain Act (VTG) contains the following provisions, among others:
- Subject and purpose (Art. 1 VE-VTG): The purpose of the law is to protect users, to ensure confidence in digital transactions and to describe the rights and obligations of service providers who perform activities on VT systems.
- Trusted technologies (Art. 3 VE-VTG): Trusted technologies (VT) are technologies that guarantee the integrity of tokens.
- Definitions (Art. 5 VE-VTG): The law contains a number of definitions, including the term "token". A token is described as an information on a VT system that embodies justifiable claims or membership rights against a person, rights to goods or other absolute or relative rights.
- Rights of disposal (Art. 6 ff. VE-VTG): A disposition is defined as the transfer of the disposition authorization on the token. The holder of the "Private Key" has the power of disposal. As a principle, the buyer of a token is protected in his right of disposal by virtue of good faith, even if the seller was not authorized to dispose of the token.
- Requirements for VT service providers (Art. 13 ff. VE-VTG): A natural person may only perform any VT services if he/she is reliable and capable to act. For legal entities, the members of the management must also be reliable. In addition, VT service providers must have a clear organizational structure, internal control mechanisms and a minimum capital of CHF 100,000.
- Basic information on the issuance of tokens (Art. 28 ff. VE-VTG): The issuance of tokens requires the prior publication of the legally defined basic information (e.g. information on tokens, rights, technologies used, purpose description, risks, etc.).
- Obligation to register (Art. 36 ff. VE-VTG): VT service providers must apply in writing to the Financial Market Authority (FMA) for registration in the VT Register before commencing their commercial activities. The FMA is responsible for reviewing the registration requirements.
- Supervision (Art. 42 ff. VE-VTG): The FMA is entrusted with the implementation of the Act.
- Penal provisions (Art. 49 ff. VE-VTG)
The consultation report can be downloaded from https://www.llv.li/files/srk/vnb-blockchain-gesetz.pdf (German only).
The consultation period ends on 16 November 2018. We will keep you informed about the outcome.