Why a legal opinion for your blockchain project it is extremely important?
1.Introduction.
A legal opinion concerning WEB3 projects is a legal tool that allows developers, investors and blockchain executives to obtain a qualified third-party opinion on the subject matter, object, financial and technological substance, as well as the legal specifics of the creation of a particular blockchain project. This opinion is a professional, legal document prepared by a competent legal professional on each specific issue or problem subject to the commissioned study.
Prior to marketing any particular blockchain project, the parties should carefully consider the nature and extent of its financial and technological substance, as well as the legal issues related thereto, in order that this analysis will serve to guarantee the rights of each participant in such investment.
2.Should the legal opinion cover an analysis of the tokens offered?
One of the key points of any ICO (Initial Coin Offering) or STO( Security Token Offering) is the listing of the issued token on a cryptocurrency exchange or crypto exchange to create its desired liquidity. Therefore, it is often important to prepare a legal opinion on the nature of the token, and the document in question explores so-called "tokenization", i.e. the concept of the financial and legal functionality of the token. In this context, the legal opinion is drafted to confirm or reject the classification of the token as a type of electronic 'security' that will function in a specific blockchain ledger. Cryptocurrency exchanges require such a legal opinion in order to relate the specific project to the relevant legal framework - for example, European blockchain projects should comply with the MiCA Regulation and the DLT Regulation.
From this perspective, should it be assessed whether the token meets the definition of a security or derivative of a security under applicable law? For example, in American law, the so-called "Howey test", the "Family resemblance test" and the "Risk capital test" are commonly used to clarify this question.
Therefore, in analyzing a particular blockchain project, the lawyers evaluating it must consider the issues of whether the token meets the definition of a security under the laws of a particular jurisdiction in which an ICO or STO is structured, whether in that order the sale of particular tokens would be subject to collective investment scheme legislation under the applicable law, and finally, whether the specific technology legislation (e.g., in Europe, the DLT pilot regime) of the destributed register for the sale of tokens in the jurisdiction in which the relevant ICO or STO is structured?
3.What should be strictly considered as a legal analysis?
As a rule, the legal opinion should be drafted by a blockchain specialist who has many years of practice on the subject and is familiar with a particular area of law - in this case blockchain. It is not desirable to give a legal opinion on the law of a foreign country or territory with which the lawyer is not familiar. Very often, US lawyers give legal opinions on European blockchain projects or vice versa - European lawyers give opinions on US ones, which risks not knowing the legal framework in detail and is not advisable.
A quality legal opinion that would serve as a legal basis for listing a token on a cryptocurrency exchange or for a cryptocurrency exchange is characterized by rigorous technological and financial drafting, clarity of the circumstances provided, detail in accordance with applicable local law, and the presence of transparent and understandable conclusions.
It is important to note that if the activity of the client being analysed turns out to be illegal, the conclusion cannot be positive. We emphasize - no self-respecting law firm, including IUSAUTHOR law office, will risk its reputation and give a disingenuous, false opinion as to the legality of a blockchain project if the activity being examined is found to be illegal.
It is important to remember that when rendering a legal opinion on any matter, it is the attorneys who are responsible for their opinion, as they are performing the legal and factual research, analysis and verification of the particular blockchain project. It is for this reason that providing a legal opinion can be quite an expensive process, and depending on whether you are obtaining a scientific level study or simply a marketing opinion, the cost may be different and formed based on specific inherently reasoned and detailed criteria for completeness.
The law does not establish a specific form that a lawyer must follow when drafting a legal opinion on blockchain projects; in most cases, they are written and carry specific formal requirements regarding the format, whereby, in addition to the analysis made, the experience of the lawyers is recorded and the document is certified with the seal of the specific law firm or with electronic signatures.
In most cases, the legal opinion includes information about the principal, details of the person to whom the opinion is addressed, information about the drafter and the task at hand. In some cases, it is assumed that the legal opinion will be used by persons other than those specified, an example being that addressed to the underwriter on the legality of the proposed token issue, which should also be relied upon by the transfer agent (transfer agent) or the issuer's bank, blockchain exchange, etc.
Very often, the legal analysis of a blockchain project covers its "white paper", which is a general presentation of the technological, financial and legal features in it, other technological documents, programming, programming languages of the individual tools, factual or legal issues that have been considered by the drafter when presenting the legal opinion, as well as information on the various marketing (channels such as Discord and Telegram) and financial mechanisms (e.g. De-Fi protocols). Often an in-depth analysis is also made as to the appropriateness of using foreign law in the event that specific liabilities, claims, company formations, etc. should occur outside the territory under study as a legal framework. This is particularly true in cases where multi-country issues are raised, requiring the involvement of relevant lawyers, financiers, software experts or foreign business partners.
4.Form of the conclusion.
The opinion of the drafting attorney is based on the detailed research performed, and in most cases the findings of the legal opinion can be supported by copies of the documents examined on which the drafter worked.
Typically, legal opinions are signed on behalf of the law firm, the law firm or the individual(s), indicating the qualifications of the person(s) who prepared the report. It should be noted that even such a seemingly insignificant point as the date of approval of the legal opinion is extremely important, as the document must show the state of the legal rules and the practice of their application at the time of drafting the opinion. This is because legal doctrine is a dynamic process and legislation, including corporate, banking and tax legislation, is subject to change and the conclusion set out in the legal opinion on a particular date may change with it.
It should be emphasised here that the legal opinion should not be seen as a substitute for legal advice, and the client should be advised that having received specific advice, it is not guaranteed to be "definitive guidance" but should be taken as detailed guidance on the development of the best standards applicable to a particular blockchain project.
Lawyers from the "IUSAUTHOR" law firm have been providing services for many years concerning the development of legal opinions on issues raised by you related to the further development of your blockchain project in detail. Ask us and we will take professional care of your desired legal analysis that concerns your blockchain business.
For more questions on the topic of blockchain legal opinions, you can email us at: This email address is being protected from spambots. You need JavaScript enabled to view it.