=
Submitted:
02/03/2022
Reviewed: 26/03/2022
Accepted: 28/04/2022
Haïssam Fadlallah
Attorney at Law and Associate Professor, Faculty of law, Lebane=
se
University–Filiere Francophone de Droit
haissam.fadlallah@hotmail.com
Today, blockchain-based
technologies, such as the Initial Coin Offering (ICO), are capable of provi=
ding
solutions for financing SMEs. ICOs are the issuing of digital tokens that w=
ill
be sold to investors in return for a cryptocurrency, allowing a project to =
be
funded. This research examines the process of this novel and alternative me=
thod
of business financing. At first glance, the ICO protocol appears to be very
similar to the Initial Public Offering (IPO) procedure raising the question=
of
how ICOs ought to be regulated. To answer t=
his
question, descriptive and analytical research will be conducted.
On a legal level, the study fo=
und
that three approaches to the regulation of ICOs exist, with the American op=
tion
being the most fascinating because it represents a middle ground between
banning and developing a new independent law for token issuance, allowing I=
COs
to be included within an existing legal framework. The study recommends that the Qatar Financial Markets Authority
adopt this American approach, so ICOs will be introduced in Qatar smoothly =
and
without the need for new legislation. This will result in a desired goal of
promoting Qatari SMEs.
Keywords: Blockchain;
Cryptocurrency; Security; SME; Tokens
Cite this
article as: <=
/span>Fadlallah, Haïssam. "Technical and legal framework of Initial coin offerings,&quo=
t;
International Review of Law, Volume 12, Regular Issue 1, 2023
© 2023, Fadlallah, licensee QU Press. This article is published under the terms of
the Creative Commons Attribution-NonCommercial 4.0 International (CC BY-NC
4.0), which permits non-commercial use of the material, appropriate credit,=
and
indication if changes in the material were made. You can copy and redistrib=
ute
the material in any medium or format as well as remix, transform, and build
upon the material, provided the original work is properly cited.
=
Submitted:
02/03/2022
Reviewed: 26/03/2022
Accepted: 28/04/2022
هيثم
فضل الله
محام &#=
1576;الاستئناف
وأستاذ مشار=
03;
في كلية
الحقوق بالج=
75;معة
اللبنانية، =
75;لفرع
الفرنسي
أصبحت
التقنيات
القائمة على
تقنية سلسلة
الكتل، مثل العرض
الأولي
للعملة
الرقمية
المشفرة،
قادرة اليوم
على توفير
الحلول
المناسبة لت=
05;ويل
المشاريع ال=
89;غيرة
والمتوسطة.
إن الع&=
#1585;ض
الأولي
للعملة
الرقمية
المشفرة هو
إصدار لرموز =
578;ُباع
للمستثمرين
مقابل عملة
مشفرة، مما
يسمح بتمويل
مشروع تجاري.<=
span
style=3D'font-size:12.0pt;font-family:"Times New Roman",serif;mso-ascii-the=
me-font:
major-bidi;mso-hansi-theme-font:major-bidi;mso-bidi-theme-font:major-bidi;
background:#FDFDFD'> تعرض
الدراسة آلية
عمل هذه
الطريقة
الجديدة
والبديلة لت=
05;ويل
الأعمال
التجارية. وللوهلة
الأولى، يبد=
08;
أن العرض
الأولي للعم=
04;ة
الرقمية
المشفرة يشب=
;ه
إلى حد بعيد
إجراء الاكت=
78;اب
الأولي؛ مما
يثير التساؤ=
04;
حول كيفية ال=
578;نظيم <=
span
lang=3DAR-LB style=3D'font-size:12.0pt;font-family:"Times New Roman",serif;
mso-ascii-theme-font:major-bidi;mso-hansi-theme-font:major-bidi;mso-bidi-th=
eme-font:
major-bidi'>القانوني=
<=
span
lang=3DAR-LB style=3D'font-size:12.0pt;font-family:"Times New Roman",serif;
mso-ascii-theme-font:major-bidi;mso-hansi-theme-font:major-bidi;mso-bidi-th=
eme-font:
major-bidi'>لعمليات ال=
;عرض
الأولي
للعملات. وللإجابة=
عن
هذا التساؤ=
04; <=
span
lang=3DAR-LB style=3D'font-size:12.0pt;font-family:"Times New Roman",serif;
mso-ascii-theme-font:major-bidi;mso-hansi-theme-font:major-bidi;mso-bidi-th=
eme-font:
major-bidi;color:black;background:#FDFDFD'>اعتم=
83;نا
المنهج
الوصفي
التحليلي.
لل=
75;قتباس: ف&=
#1590;ل
الله، هيثم. «الإطار
التقني
والقانوني
للعروض
الأولية للع=
05;لة
الرقمية
المشفرة»، المجلة
الدولية
للقانون،
المجلد
الثاني عشر،
العدد
المنتظم
الأول، 2023
©
2023، فضل الله، =
الجهة
المرخص لها:
دار نشر جامع=
577;
قطر. تم نشر هذ&=
#1607;
المقالة
البحثية
وفقًا لشروط&nbs=
p;Creative Commons
Attribution-NonCommercial 4.0 International (CC BY-NC 4.0). تسمح هذه
الرخصة
بالاستخدام
غير التجاري=
48; وينبغي
نسبة العمل
إلى صاحبه، م=
593;
بيان أي تعدي=
604;ات
عليه. كما
تتيح حرية
نسخ، وتوزيع=
48;
ونقل العمل
بأي شكل من
الأشكال، أو
بأية وسيلة،
ومزجه
وتحويله
والبناء
عليه؛ طالما
يُنسب العمل
الأصلي إلى
المؤلف.
=
Today’s businesses, particularly
start-ups, confront a serious problem in finding suitable fundraising to ki=
ck-start
their activities in a world of cutthroat competition. More importantly, rel=
ying
on the traditional means of a public offering in this regard could not
necessarily ensure the success of fundraising, for a variety of reasons. Su=
ch
is the fact that public offers are not open to all sorts of businesses, as =
well
as the complexities of the process (the need for intermediaries, time limit=
s,
and the risk of not reaching the required cap)[1].
Moreover, the financial crisis, combined with banking rules, drastically
reduced the resources available to small and medium-sized firms (SMEs), and
much more so to new entrepreneurial operations.[2] Nonetheless, SMEs are today one =
of the
most important economic cornerstones, and, in order to reach such an outcom=
e,
SMEs must be active. This scenario necessitates allowing SMEs to obtain
adequate funding. However, as mentioned above, this objective is
challenging for a variety of reasons. In brief, funding may be selective and
heavily bureaucratic, and thus closed before SMEs. Moreover, investors=
and
the banking industry may prefer to focus on large, well-established enterpr=
ises
that are already generating significant profits. This situation is true for=
all
countries in general, as well as Qatar in particular. This demonstrates the
importance of finding new ways to fund SMEs. More particularly, we need to =
find
funding tools that are as open to the public as feasible. In other words, m=
ore
democratic funding tools are required today.
Due to such factors, entrepreneu=
rs
began to look for new alternative types of funding. Fortunately, new advanc=
es
in digital technology are able today to provide some interesting options su=
ch
as crowd fundraising and initial coin offerings introduced by decentralized
blockchain businesses.[3]
Indeed, technology and innovation tend to reshape the financial industry
quicker than the legal and regulatory structure can effectively respond.[4]
Furthermore, because modern digi=
tal
technology is made to be widely available to the general public, they may be
able to quickly attain the goal of funding SMEs, highlighting the importanc=
e of
this topic. This study looks at the ICO as one of the blockchain-based fund=
ing
mechanisms. In fact, ICOs are valuable tools since they are particularly me=
ant
to fund corporate activity.
The initial coin offering (ICO)
represents the current tendency among legal practitioners of attempting to =
keep
the best of both worlds: delving into the new area of blockchain and
crypto-economics while pulling inspiration from the well-known concept of I=
PO
"Initial Public Offering."[5]
The ICO is an intriguing innovat=
ive
process to investigate because it offers many benefits desired by
entrepreneurs, such as simplicity (the absence of a third-party intermediar=
y),
a broad range of targeted public (internet users), and, most importantly, it
would keep ownership of the shares with the initial founders or shareholder=
s,
granting the investor certain investment rights.
In this context, the term
"Initial Coin Offering" refers to a public sale of digital assets,
namely coins or tokens, by a company looking to raise external funds.[6]
The purchase is managed and recorded on a blockchain, a "distributed
ledger technology," that aids in the recording of transactions or the
tracking of assets in a corporate network.[7].
This technology allows for the exchange of value without the need for a tru=
sted
central authority or middleman.[8]
As a result, an ICO is simply a
means of generating funds in which the issuer issues a limited number of
blockchain-created tokens in exchange for a payment in cryptocurrency. The
tokens are distributed to online investors, physical or moral persons, by t=
he
fund issuer who issued them.[9]
Although ICO may have numerous
advantages, it is important to note that, unlike IPOs, there is a lack of
clarity regarding the legislative framework applicable to the offers and to=
kens
produced.[10]
Moreover, regulatory uncertainty arises regarding the underlying distributed
ledger technology and its digital applications, on which ICOs are based.[11] It
is important to note that legislation surrounding ICOs are still in the ear=
ly
stages of development and vary among jurisdictions. That is why companies a=
nd
investors investigate ICOs in jurisdictions all over the world due to their
worldwide nature.[12] More
specifically, the disruptive and fairly modern nature of ICOs has resulted =
in a
variety of approaches and solutions for their adoption. Indeed, the
incorporation of ICOs into legal systems could be accomplished through a
variety of mechanisms. This reality necessitates a discussion of the techni=
cal
and legal basis of ICOs.
Based on the above, the fundamen=
tal
question that we attempt to answer here is as follows: What technical and legal framewo=
rks
apply to ICOs globally and what impact do these frameworks have on companies
seeking funding?
To answer this question, descrip=
tive
and analytical research will be conducted. We will be able to characterize =
the
frameworks of the ICO through descriptive research. While analytical study =
will
enable us to evaluate ICOs in terms of their ability to contribute to the
funding of SMEs.
We
will attempt to address this question by studying the technical (1) and leg=
al
(2) frameworks of ICO.
This section outlines the several
steps that comprise the procedure of an ICO (1.1) and then compares ICOs to
IPOs (1.2).
The ICO process is carried out
between issuer start-up enterprises and investors. In other words, only
companies and investors are involved in the ICO process.[13] An
oversimplified explanation of the ICO process is that issuers raise funds by
selling digital tokens. These tokens are digital representations of value t=
hat
may be traded electronically and serve as a medium of exchange, a unit of
account, or a store of value.[14]
Tokens can be promoted and sold once an issuer has finished creating them,
which is often done through the use of an established platform such as
Ethereum. Investors can exchange cryptocurrencies for the new tokens by usi=
ng
smart contracts.[15]
Simply put, an ICO is made up of electronic writings that follow the three basic procedures outlined below:<= o:p>
The first step corresponds to the
total funding amount and pricing of ICOs. Here, the entire financing amount
should correspond to the goal of an ICO. A hard cap or a soft cap can ensure
this. A hard cap is the maximum number of tokens that can be issued. In
contrast, a soft cap is the minimal amount of investment required for a
successful ICO, and thus the amount below which investors will be returned =
if
the ICO fails to meet its funding target[16].
Although an ICO's total fundrais=
ing
amount should be set, an uncapped token sale with an unlimited number of to=
kens
is still possible. However, the major danger of uncapped ICOs for investors=
is
not knowing what percentage of the overall supply a coin represents.[17]
Nevertheless, the fact remains, that most ICO offerings are capped, with a =
cap
on the amount they seek to raise, which translates into a cap on the number=
of
tokens released. This is explained by the fact that uncapped ICOs risk token
"inflation," in which the value of existing tokens is diminished =
with
each new token issuance.[18]
Furthermore, a difficulty may oc=
cur
at this level because the price of ICO tokens may be dependent on the price=
of
the major cryptocurrency used to purchase it and to which it would be conve=
rted
when sold. Indeed, it is observed that tokens are typically exchanged again=
st
one of the major cryptocurrencies in primary or secondary markets, hen=
ce
the price of the reference cryptocurrency is inextricably tied to the price=
of
these coins. Given the significant instability seen in such reference
cryptocurrencies, this subjects tokens supplied to heightened volatility.
Consequently, we could note that=
the
difficulty in assigning a fair value to tokens produced in ICOs may thus hi=
nder
the widespread usage of ICOs as a financing method for SMEs.[19]
Conversely, token prices may swiftly rise, creating an opportunity for
investors to invest. Thus, this expectation of future financial gains is wh=
at
may very well drive investors to purchase ICO tokens.
In other terms, if the startup's
business model succeeds and the firm's value rises, investors can sell toke=
ns
at a higher price than they paid for them.[20]
The
second step corresponds to the issuance of a whitepaper or "ter=
ms
of sale of tokens."[21]
Because investors do not own shares in this start-up compa=
ny,
the issuers face significant challenges. As a result, they must
persuade investors and encourage them to invest. To accomplish this, the
issuers provide financial rights to the investors in a smart
contract that is made between the former and the latter.[22]
That is why, at this level, the fundraiser publishes a document known as a
white paper (which is generally available on the ICO’s website), before the
sale of tokens to persuade investors of the viability of their ICO.[23]
The most typical aspects of
whitepapers are descriptions of the entire project to potential investors,
including the legal structure of the ICO, the initial token price, the righ=
ts
and guarantees attached to the tokens to be issued, the determination of the
soft cap and the hard cap.[24]
Thus, whitepapers can provide information about the legal procedure,
contractual terms, and the legal framework is generally incorporated in the
terms and conditions of ICOs.[25]
It is worthwhile to mention that
there are no rules for what should be contained in a white paper. However, =
as
abovementioned, white papers most frequently contain project specifics, the
necessary amount of capital, a description of the tokens to be sold, a
valuation of the tokens, and how the company intends to use the offering fu=
nds.[26]
Although
some white papers are fairly detailed, they cannot be =
compared
to the prospectus required by security regulations. More precisely, while i=
t is
necessitated by security regulations that the prospectus provide thorough
information on the issuer, this part is frequently lacking from white paper=
s.[27]
The
third step corresponds to the token sale. =
The
ICO’s fundraiser specifies to investors, in a guide available on the ICO’s =
website,
the many wallets into which these investors must deposit their cryptocurren=
cy
to participate in the ICO.[28]
In other words, when investors buy tokens, they often send funds in the for=
m of
cryptocurrency to a predetermined wallet address. From a technical standpoi=
nt,
the cryptocurrencies are transferred from the investor’s wallet to the comp=
any’s
wallet, frequently via a smart contract developed by the company.
At this stage, it is worth noting
that ICOs may succeed or fail after collecting funds. As previously mention=
ed,
whenever the soft cap of the funding volume is not met, the ICO is dee=
med
unsuccessful, and the funds contributed are normally returned to the invest=
ors.
If the pre-defined financing level is met within the set time-frame, the IC=
O is
successful and can be continued.
Trading of tokens on secondary
markets after an ICO is neither automated nor guaranteed. A token’s listing=
and
active trading on a cryptocurrency exchange platform is seen as an indicati=
on of
success for the IPO. Because secondary trading is important, simply launchi=
ng
an ICO and issuing a token is insufficient: SMEs must be capable of keeping
tokens in the market by ensuring investors are eager to acquire them in the
post-offering market.[29]
A corporation distributing crypto
tokens to the public online in exchange for funding unmistakably surely rec=
alls
an initial public offering (IPO), governed by security laws, wherein a comp=
any
distributes securities to the public on a stock market.[30]
This analogy is used because, du=
ring
an ICO, a corporation or individual creates and sells its cryptocurrency us=
ing
blockchain technology to the wider public. This is comparable to a corporat=
ion
selling stock to the public as part of an IPO.[31] In fact, an initial public offeri=
ng
(IPO) is when a security is sold to the public for the first time, allowing=
a
private company to go public.[32]
F=
urthermore,
IPOs are usually likened to ICOs because the former is an alternative for t=
he
latter. Indeed, both are public offerings of instruments with rights
attached that are intended to raise capital for the issuing firm. However, =
the
similarities between the two mechanisms are restricted to language, as the
mechanisms diverge on many levels. Here, we focus on the following three ma=
jor
divergences:
First, it is stated that IPOs are
for established firms with a proven running business, and a solid cash flow
generation, whereas ICOs are for start-ups that may not even be incorporate=
d and
do not yet have established operations.
Thus, in terms of time in the SME
life cycle, the two methods respond to distinct stages. In fact, IPOs are
utilized as an exit after a venture capital funding, whereas ICOs seek laun=
ching
fundraise (series A funding).[33] Said differently, ICOs are a nov=
el
means of acquiring funds for early-stage enterprises, serving as an alterna=
tive
to more established sources of startup funding such as venture capital and
angel financing.[34]
Second, the rights granted to offering participants are significantly different between the two financing forms. This is explained by the fact that IPOs provide shareholders with ownership rights in the firm, dividends distributed annually based on the company’s earnings during a year, and voting rights; whereas the rights gra= nted to token holders vary depending on the token’s structure, but in general, I= COs do not confer ownership rights in the project.[35] This is a significant benefit to entrepreneurs that want to raise capital b= ut do not want to give up a portion of their ownership, which is one of the key barriers to the use of public stocks (IPOs) by SMEs.[36] As a result, a tokens sale is a technique of selling participation in a pro= ject (that will begin at a later date), unlike an IPO offers a share of the comp= any’s ownership.[37]<= o:p>
In line with the previous
observation, IPOs represent a share of a company’s ownership and allow
investors to benefit from the company’s profits. A share is a security that
symbolizes the ownership of a company’s assets by a shareholder. This is
evidence of co-ownership of a portion of the company’s capital.[38] Tokens,
on the other hand, provide project-specific rights.[39]
In fact, various sorts of tokens exist, and they can be independently creat=
ed
and have a variety of purposes depending on the business of the entity.
Third, ICOs have fueled a steady
trend of democratization and the involvement of small investors. As a resul=
t,
ICOs contribute to the democratization process as well as the acceleration =
of
banking disintermediation. Indeed, ICOs have the potential to eliminate man=
y of
the financial intermediaries in the world’s security markets.[40]
In other terms, ICOs allow startup developers to effectively fundraise for
their activities, circumventing both banks and non-banking institutions,
conventional investors, by providing liquidity to small investors who would
otherwise be unable to invest in highly innovative ventures.[41]
An ICO, unlike an IPO, does not require financial institution underwriting =
and
is substantially less expensive. ICOs can be many times less expe=
nsive
than traditional IPOs given the lack of legal constraints and regulations, =
as
well as the use of digital identity-based processes rather than paperwork
throughout the process.[42]
This
section describes the several major kinds of ICO tokens (2.1), as well as t=
heir
legal status (2.2).
Tokens are, in theory, entries o=
n a
blockchain.[43]
Utility tokens and security tokens, also known as equity tokens, are the two
main forms of digital tokens released in an ICO.
To begin, utility tokens are tok=
ens
that must be used to benefit a service. As a result, owning utility tokens
confers no unique rights within the network; rather, it entitles just the o=
wner
to use a service,[44] which
means, this type of token grants its holder consumptive rights to a product=
or
service.[45]
In terms of practicality, the
utility token is the most extensively utilized sort of token. Utility tokens
could be utilized as a vehicle of value exchange, but their primary functio=
n,
as above-mentioned, is to serve as a pre-selling arrangement for investors =
to
gain access to the issuer’s project or to use future services. For example,
some tokens just provide the right to use the service offered by a blockcha=
in.
Second, we find security tokens,
sometimes known as "financial tokens," that confer on their beare=
rs
privileges similar to those conferred by financial securities, such as
pecuniary or political rights in their issuer’s governance.[46]
This is why security tokens are comparable to traditional securities in that
they promise a portion of a project’s growth, development, or profitability.
They can also guarantee a portion of future corporate earnings or capital
flows. As a result, a token promoted primarily to distribute dividends may =
be
regarded as a security.[47] In
terms of economic function, these tokens are thus analogous to stocks, bond=
s,
or derivatives.[48]
This is why, in terms of business investment, this type of token is more
appealing than utility tokens.
Therefore, if security tokens
incorporate profit participation and participation rights, such as voting
rights within the firm, they can be used to invest in the company itself. In
the United States, these tokens are covered by security laws based on the H=
owey
test (see below).[49]
One of the key contrasts between
security tokens and ordinary stocks in this regard is the method of registe=
ring
ownership. While security tokens represent ownership on a blockchain,
traditional equities are maintained in databases and may be validated by a
paper certificate.[50]
For
ICO regulation, jurisdictions have chosen one of the three main options. Fi=
rst,
some jurisdictions have opted for a total prohibition (this is the case wit=
h China).
Second, some jurisdictions have opted to integrate token issuances inside t=
he
existing regulatory framework of either financial instruments (USA) or paym=
ent
services (Japan). Third, it appears that certain jurisdictions are consider=
ing
the introduction of a new, specific framework for token issuances. This is
unmistakably true in the case of France.[51]
Because
U.S. security laws are frequently followed and adopted, at least informally=
, by
many other nations, how U.S. courts interpret ICOs will have global
ramifications.[52]
The
most fundamental legal problem facing ICO tokens is
whether they qualify as securities. The Securities and Exchange Commission
(SEC) in the United States was the first regulator to take a firm stance on=
the
application of US securities rules to token sales.
After the American stock market
crash of 1929, Congress enacted two statutes: the Securities Act of 1993
governs securities issuance, whereas the Securities Exchange Act of 1934
governs the trading of issued securities.[53] The
Securities Act of 1934 is the federal regulatory framework for security
offerings in the United States. This statute only applies when a security is
involved in a transaction. "In short, a security is an interest in a
corporation or other legal entity with certain rights such as voting,
ownership, cash flows, assets, statutory or contractual rights, corporate
governance rights, and the expectation of profit. Stocks, bonds, commercial
debt, futures, derivatives, and the list of traditional characters populate
this list."[54]
Accordingly, the term
"security" is seen as a catchall word for innovative financial
entities that lack the form of traditional securities (such as shares or bo=
nds)
but communicate equivalent rights. The Supreme Court created a standard in =
the "Securities
and Exchange Commission v. W.J. Howey Co."[55]
decision to assess whether a transaction can be called an investment contra=
ct,
and it was applied for the first time for a token in 2017.[56]
In fact, an "investment contract," a catchall subset of the term
"security," serves as the pivot for the application of US securit=
ies
regulations.[57]
Therefore, the term "investment contract" has been the most
extensively defined in the definition of security (The 1933 Act, §2(a)(1)).=
If
the coins of ICOs are deemed "securities," it is most certainly
because they are deemed "investment contracts."[58]
In
this line, the 1946 U.S. Supreme Court Howey
decision established the threshold for evaluating what constituted an
"investment contract."[59]
The Court used "the Howey test" to the contract in question to de=
cide
whether it met the definition of "investment contract" in the 1933
Act. In other words, the SEC used the four-part Howey test to control wheth=
er
an investment program qualifies as a security in the United States.[60]
The test consists of four variab=
les
that must all be present for an investment contract to be formed: (1) monet=
ary
investment, (2) a joint venture, (3) a reasonable expectation of profit, and
(4) profit obtained from the managerial efforts of others. If this criterio=
n is
met, the token constitutes an investment contract and is subject to US
Securities rules.[61]
On July 25, 2017, the SEC issued=
a
report, the 21A investigative report (the “DAO Report”), on the DAO token’s
compliance (DAO is a network of smart contracts created in 2016 in Germany)
with US securities laws.[62]
The question was whether the DAO token was an "investment contract &qu=
ot; or
not.
As a result of using the four-pa=
rt
Howey test, the SEC ruled that investment tokens (for example, DAO) tokens =
are
subject to US securities laws, and therefore the DAO token was needed to be
registered with the SEC.[63]
Thus, ICOs that do not have obvi=
ous
utility purposes, and non-utility tokens are almost likely securities under
Howey. In other terms, coins that can be demonstrated to serve consumptive
rather than financial purposes must fail the Howey test.[64] However,
if a token purchaser plans to utilize a token as a consumer, it indicates t=
hat
he is not driven by the desire for financial profit.[65]
In consequence, with Howey, the
Supreme Court has strongly preferred the substance of the 1933 Act’s defini=
tion
of "security" over its form, allowing the SEC to wield extensive
powers over a diverse range of transactions. As a result, the Howey test is
purposefully broad, reflecting Congresses broad notion of "security.&q=
uot;[66]
Small and medium-sized enterpris=
es
(SMEs) are critical to the development and growth of emerging countries aro=
und
the world. SMEs account for 99 percent of all enterprises in the areas in w=
hich
they operate, according to the European Bank for Reconstruction and
Development. This is also true in Qatar, where 96 percent of the 25,000
registered enterprises fall within the SME category.[67]
The World Competitiveness Yearbo=
ok
2020 placed Qatar sixth in the world in terms of economic performance, as w=
ell
as seventh in terms of government efficiency and eleventh in terms of busin=
ess
efficiency. Despite these realities, SMEs in Qatar confront hurdles from the
start.[68]
In fact, SMEs are sometimes
limited in their ability to raise critical funds without depleting personal
reserves. These hurdles can be seen in Qatar, where regulatory requirements=
are
high and the Qatari banking system is frequently tailored to favor larger
firms, blocking even successful and profitable SMEs from mainstream financi=
al
services.[69]
In other words, many SMEs avoid attempting to receive trade finance due to =
the
time-consuming aspect of the application procedure and the poor success rat=
e.[70]
Indeed, only 24 percent of SMEs used commercial bank loans in 2016, while 25
percent used loans from friends and family.[71]
Indeed, Qatar is ranked 108=
th
in the World Bank’s Doing Business 2020 report (Economy profile - Qatar) for
starting a business. To register a new business in Qatar, 9 procedures, 10
days, and up to QR19,000 (approximately) are required.[72]
The excessive quantity and cost of these procedures constituted a significa=
nt
barrier to entry for new businesses.[73]
These restrictions must be reduc=
ed
as much as feasible in order to improve the participation of SMEs to t=
he
Qatari economy. This necessitates financing policies that effectively promo=
te
and facilitate SMEs in their efforts to raise capital. Recognizing ICOs cou=
ld
be one of the possibilities for financing SMEs. In this view, ICOS recognit=
ion
will be consistent with the State’s goal of developing a sustainable econom=
y in
accordance with the Qatar National Vision 2030.[74]
On the other hand, despite the
growing trend and interest in ICOs, and as previously mentioned, certain ju=
risdictions
throughout the world have explicitly prohibited them, notably the People’s
Republic of China, where the primary regulators jointly prohibited ICOs and=
the
enacted freezes on them.[75] That
is why a committee led by the People’s Bank of China issued a prohibition on
fundraising for new cryptocurrency operations known as initial coin offerin=
gs
(ICOs) or "token sales" in September 2017.
In 2018, the Qatar Central Bank
issued a circular with the same wording as the notice given by Chinese
authorities. The Qatar Central Bank (Supervision and Control of Initial
Institutions Division) released Circular No. 6/2018 on Bitcoin Transactions.
According to this circular, Bitcoin is prohibited in Qatar. While the circu=
lar
clearly prohibits Qatari banks from trading in Bitcoin, it might be interpr=
eted
as applying to all cryptocurrencies.[76]
Furthermore, we can deduce that =
ICOs
in Qatar are implicitly prohibited since the circular states that: "Qa=
tar
Central bank urges all banks operating in Qatar not to deal with Bitcoin, or
exchange it with another currency, or open an account to deal with it, or s=
end
or receive any money transfers for the purpose of buying or selling this
currency. QCB shall impose penalties in accordance to the provisions of the=
Law
of the Qatar Central Bank and the Regulation of Financial Institutions “Law=
no.
(13) of 2012” in case of any violations of the above mentioned instructions=
."
Other countries in the Arabic Gu=
lf
region have taken similar stance on cryptocurrency. This is the case, for
example, in the United Arab Emirates (UAE), where all transactions in
"virtual currencies" are illegal under article D.7.3 of the
Regulatory Framework for Stored Values and an Electronic Payment System,
established by the Central Bank of the United Arab Emirates in January 2017=
.[77] Although
there is presently no particular regulation governing ICOs in the UAE, the
Securities and Commodities Authority, the governmental organization in char=
ge
of regulating the UAE’s financial and commodities markets, issued a circula=
r on
2 April 2018 warning investors against digital, token-based fundraising
operations such as ICOs. The Securities and Commodities Authority emphasized
that it does not recognize, regulate, or monitor any ICOs, and that investo=
rs
are taking a risk by participating in any ICO.[78]
What is noteworthy in the case of
Qatar, however, is that on the margins of the 5th Doha Islamic
Finance Conference, the world’s first Islamic Electronic Exchange Platform =
for
digital e-token I-Dinar was inaugurated on March 19, 2019. The I-Dinar plat=
form
is a blockchain-based e-token with an initial value of one dinar backed by =
one
gram of actual gold. The Qatar Financial Centre has granted its primary
clearance to operate the "I-Dinar exchange", a multi-product digi=
tal
trading platform that trades the I-Dinar with and against other commodities,
financial instruments, and goods, as well as major fiat currencies globally=
.[79]
What is significant here is that
this novel tool, the I-Dinar, may pave the way for the adoption of fund-rai=
sing
strategies such as crowdfunding and ICOs in the future.
The
implementation of ICOs necessitates a dual imperative: on the one hand, a
prerequisite, which is the identification of a type of cryptocurrency that =
will
be utilized to complete the ICO process. On the other side, there must be a
legal framework in place for token issuances.
First,
as previously stated, the I-Dinar platform is a blockchain-based e-token th=
at
has been granted primary approval by the Qatar Financial Centre (QFC) to
operate the I-Dinar e-Exchange, and thus could be used to accomplish the
capital fundraising desired by the ICO.
Second,
if the American approach to ICO regulation is followed, we may include token
issuance in Qatar under an existing financial instrument regulatory framewo=
rk. What is particularly intriguing in this case is =
that
the definition of securities in Qatari law is very similar to the one defin=
ed
in the American 1933 act. That is why Law No. 8 of 2012 governing the
Qatar Financial Markets Authority may be important in providing a legal
foundation for any possible token issuance. In fact, article 1 of law No. 8=
of
2012 defines "securities" as &qu=
ot;the
corporate shares and bonds of Qatari shareholding companies, bonds, sukuk
(Islamic bonds), bills issued by the government or any public Qatari author=
ity
or institution, or any other securities, including non-Qatari securities,
licensed by the Authority. The derivatives, commodities and other investment
instruments licensed by the authority are considered equivalent to “securit=
ies.”"
Tokens, more precisely security tokens, issued on a
blockchain could be regarded as "investment instruments" in this
context, making them equal to securities and, as a result, allowing the lau=
nch
of a lawful ICO in Qatar.
Nevertheless, at any given time, the Qatar Financial Mark=
ets
Authority must favor a balanced approach to token legislation in this regar=
d. In
practice, this means that before holding an ICO, a factual case-by-case
investigation is required to ensure that each ICO involves the sale of
securities and is thus subject to Qatari regulation.[80]
Fraud is inextricably linked to
early financial markets, and because many projects have yet to provide work=
ing
goods, ICOs as a way of funding face credibility issues. That is why, despi=
te
the fact that ICOs became popular in 2017, raising hundreds of billions of
dollars, ICOs project values were just a few months later at fractions of p=
rior
years’ highs, prompting some analysts to declare a "crypto winter.&quo=
t;[81]
The following is a typical plan =
for
fraudulent offerings and ICO scams: the owners of a company deceive investo=
rs
through ICOs that promise to issue digital tokens backed by investments, su=
ch
as real estate or gold. However, there is no real estate or gold backi=
ng
the tokens, and the tokens actually have never been produced or sent to
investors. Simply said, there are incidents of outright fraud in which there
was no actual company and no assets or other commercial operations with the
ability to create profits for token purchasers.[82]
ICOs raise numerous challen=
ges.
While some regard the ICO as an innovative and legitimate way to gather fun=
ds,
others consider it as hazardous and fertile for fraud.[83] In
fact, the general appeal of virtual currency and blockchain technology, like
many lawful ways of obtaining funds, may be a tempting vehicle for fraudule=
nt behavior.
That is why we believe the Qatar Financial Markets Authority, like the SEC,
should establish a dedicated Cyber Unit to assure a continuing protection
for both investors and market integrity in this arena.[84] The
SEC has taken a more aggressive position in monitoring ICO activities, along
with the establishment of a new Cyber Unit inside the Enforcement Division =
with
a broad scope to investigate cyber-related crimes, including, specifically,
ICOs and digital token sales.[85]
Today’s
capital formation and fundraising may be a difficult endeavor, especially in
the present business environment, when competition among enterprises to att=
ract
investors may be described as fierce. This reality is much more difficult f=
or
start-ups and SMEs in
general, and in Qatar, particularly.
T=
hat
is why, when launching a firm, the entrepreneur must consider how to fund t=
he
venture. While debt funding is not always available, there are various
equity funding choices. An ICO is one such source of finance for
early-stage enterprises. ICO
is a method of obtaining funds for a blockchain project by selling tokens
before the system is operational.[86]
A corporation generates its own money on a blockchain, which is represented=
by
tokens or coins bearing its name. Tokens can then be exchanged for
cryptocurrency or fiat currency on platforms.[87]
Some believe that ICOs are analo=
gous
to initial public offerings (IPOs), in which investors buy shares in a firm=
. Nonetheless,
an ICO differs from an IPO in that it allows the project’s developer to rea=
dily
raise funding via cryptocurrencies, avoiding the lengthy, costly, and
cumbersome legal process that includes an IPO, which may be clearly represe=
nted
as a traditional fundraise.[88]
Although
many see the ICO as non-regulated security that allows businesses to make
unjustified capital increases, others see this lack of regulation as provid=
ing
ICOs with great flexibility, allowing them to be game-changers in the
traditional venture funding procedure.[89]
In this vein, the SEC’s 2017 ruling on DAO ICOs stated that the quality of a
token as a security would be decided by whether it fulfills the four-part H=
owey
test.[90]
"The SEC has clearly drawn a line in the sand by asserting regulatory
authority over ICOs pursuant to the Howey test. =
Major
international regulators have followed suit."[91]
It
is important to a legislator to ensure that this disruptive technology does=
not
jeopardize legal progress in protecting investors and consumers. As a resul=
t,
legislation must determine if new laws are required to protect digital asse=
ts
or whether existing rules are sufficient.[92] The latter
approach, adopted by the American model, simply integrates ICOs into existi=
ng
regulations. This range of options highlights the contentious nature of ICO=
s.
In this regard, the American method, which offers a smooth and middle path,
appears to be the more appropriate in this field, as it allows to benefit f=
rom
this new democratic finance instrument while remaining extremely cautious w=
hen
investigating ICO situations.
In
the case of Qatari law, such an innovative process could be aided, on the o=
ne
hand, by the adoption of the I-Dinnar, the first hybrid cryptocurrency
established by a State, in 2019. On the other hand, it might be done by
including future security token issuance within the existing regulatory
framework of "securities," as outlined in Law No. 8 of 2012. That=
is
why, given Qatari authorities’ desire and strategy to promote SMEs and
entrepreneurship, it may appear appropriate to embrace ICOs as modern, and
potentially, effective means of funding, while remaining cautious in the
implementation of ICO operations to avoid uncertainties and funding frauds.=
Therefore,
this solution allows Qatar Financial Markets Authority to incorporate =
ICOs
into the Qatari legal system without the need for a new law. As a result, t=
he
Qatar Financial Markets Authority must conduct a fact-based case-by-case
examination to guarantee that each ICO complies with Qatari regulations.
Furthermore, a cyber unit under the Qatar Financial Markets Authority might=
be
formed to fight ICO scams.
I- Legal bo=
oks
and reports
De vaulpan, H., "Overview of
ICO regulation around the world", 2018, pp. 1-56. Available at: https://www.kramerlevin.com/images/content/4/6/v2/46184/181115-=
presentation-ICO.pdf (Last visit, 14 February 2022).
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at: https://www.doingbusiness.org/content/dam/doingBusiness/country/q/qatar=
/QAT.pdf
(Last visit, 7 April 2022).
Durovic, M.,
Trimidas, T., New directions in European private law, Hart publishing, 2021=
.
Gurcan, B.,
"The legal framework of the cryptocurrencies and initial coin offerings
(ICOs)", Thesis, Budapest business school - Faculty of international
management and business, 2018.
Qatar Devel=
opment
Bank, The state of small & medium enterprises (SMEs) in Qatar, 2020, pp=
. 1-108.
Available at: https://www=
.qdb.qa/en/Documents/State%20of%20SMEs%20in%20Qatar%202020%20EN.pdf<=
/a> (Last visi=
t,
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.oecd.org/finance/ICOs-for-SME-Financing.pdf (Last visi=
t,
15 February 2022).
=
II -
Legal articles
=
A-
Legal articles in English
Alagos, P., "Qatar hosts gl=
obal
launch of world’s 1st Islamic digital e-token ‘iDinar’", 19
March 2019. Available at: https://www.gulf-times.com/story/626327/Qatar-hosts-global-laun=
ch-of-world-s-1st-Islamic-digital-e-token-iDinar (Last visit, 14 February 2022).
AlThani, M., "How can Qatar
improve SME support?", 4th International conference on
management, economics & finance, 10-12 September 2021, Zurich, Switzerl=
and,
pp. 10-21. Available at: https://www.dpublication.com/wp-content/uploads/2021/08/F8-8418=
.pdf (Last visit, 28 March 2022).
Arnold, L., Brennecke, M., Fridg=
en,
G., Guggenberger, T., & "Blockchain and Initial coin offerings:
Blockchain's implication for crowdfunding", pp. 1-30. Available at: https://www.researchgate.net/publication/325128747_Blockchain_a=
nd_Initial_Coin_Offerings_Blockchain's_Implications_for_Crowdfunding=
(Last visit, 16 February 2022).
Brau, J.,
Fawcett, S., "Initial public offerings: an analysis of theory and
practice", The journal of finance, Vol. 61, n. 1, 2006, pp. 399-436.
Cohney, S.,
Hoffman, D., Skarloff, J., & Wishnick, D. "Coin-operated
capitalism", Columbia law review, Vol. 119, n. 3, 2019, pp. 591-676.
Dahdal, A.,
Truby, J., & Botosh, H., "Trade finance in Qatar: Blockchain and
economic diversification", Law and financial markets review, Vol. 14, =
I.
4, 2020, pp. 223-236.
Dell'Erba, =
M.,
"Initial Coin Offerings: The Response of Regulatory Authorities",=
New
York University Journal of Law and Business, Vol. 14, n. 3, 2018, pp.
1107-1136.
Dierksmeier,
C., & Seele, P., "Cryptocurrencies and business ethics", Jour=
nal
of business ethics, Vol. 152, n. 1, pp. 1-14.
Essaghoolia=
n,
N., "Initial Coin Offerings: Emerging Technology's Fundraising
Innovation", UCLA Law Review, Vol. 66, no. 1, 2019, pp. 294-344.
Fenwick, M.=
, &
Vermeulen, E., "Technology and Corporate Governance: Blockchain, Crypt=
o,
and Artificial Intelligence", Texas Journal of Business Law, vol. 48, =
n.
1, 2019, pp. 1-16.
Fitts, W.,
"Initial Coin Offerings: Getting Rid of the Venture Capitalist", =
The
Tennessee Journal of Business Law, Vol. 20, n. 2, 2019, pp. 927-932.
Howell, S., Yermack, D., & N=
iessner,
M., "Initial coin offerings: Financing growth with cryptocurrency token
sales", pp. 1-66. Available at: https://www.researchgate.net/publication/344944152_Initial_Coin=
_Offerings_Financing_Growth_with_Cryptocurrency_Token_Sales (Last visit, 15 February 2022).
Mammadov, R=
.,
"White paper for the Qatari development bank - Improving the Impact of=
SME
Lending to Establish a Vibrant National SME Sector", July 2011, pp. 1-=
10. Available
at: https://www=
.researchgate.net/publication/308730700_White_Paper_on_Improving_the_Impact=
_of_SME_Lending_in_Qatar/link/5bd35e4a92851c6b2791f812/download<=
span
style=3D'font-family:"Times New Roman",serif;mso-ascii-theme-font:major-bid=
i;
mso-hansi-theme-font:major-bidi;mso-bidi-theme-font:major-bidi'> (Last visi=
t,
28 March 2022).
Maume, P., =
&
Fromberger, M., "Regulations of Initial Coin Offerings: Reconciling U.=
S.
and E.U. Securities Laws", Chicago Journal of International Law, Vol. =
19,
n. 2, pp. 548-585.
Mendelson, M., "From initia=
l coin
offerings to security tokens: A U.S. federal securities law analysis",
Stanford technology law review, Vol. 22, n. 1, 2019, pp. 52-94.
Momtaz, P.,
"Initial coin offerings", 2020, pp. 1-30. Available at: https://www=
.researchgate.net/publication/341555998_Initial_Coin_Offerings/link/5ecbc5d=
d299bf1c09add4646/download (Last visi=
t,
13 February 2022).
Moran, J.,
"The impact of regulatory measures imposed on initial coin offerings in
the United States market economy", the catholic university journal of =
law
and technology, Vol. 26, n. 2, 2018, pp. 213-258.
Oren, I.,
"ICO's, DAO's, and the sec: A partnership solution", Columbia
business law review, Vol. 2, 2018, pp. 617-658.
Ozeysil, M.,
"Initial coin offerings (ICOs): a comprehensive review on start-up
firms", Pearson journal of social sciences and humanities, Vol. 6, I. =
6,
2020, pp. 285-294.
Park, J.,
Park., H., "Regulation by Selective Enforcement: The SEC and Initial C=
oin
Offerings", Washington University Journal of Law & Policy, Vol. 61,
2020, p. 99-132.
Parlow, A.,
"Securities liability and the role of D
Plaweski, S=
.,
Initial coin offering regulation: a comparative examination, University of
Glasgow, 2019, pp. 1-61.
Preston, J.,
"Initial Coin Offerings: Innovation, Democratization and the SEC",
Duke Law & Technology Review, Vol. 16, n. 1, 2018, pp. 318-332.
Riaa Barker=
, G.,
"A guide to Initial coin offerings in the United Arab Emirates", =
pp.
1-2. Available at:
https://www.riaabarkergillette.com/uae/wp-content/uploads/2018/05/RIAABG-In=
sight-Initial-Coin-Offerings-RIAA-BG-03.05.2018.pdf
(Last visit, 14 February 2022).
Ritter, J.,
"Initial public offerings", Contemporary finance digest, Vol. 2, =
n.
1, 1998, pp. 5-30.
Robinson, R=
.,
"The New Digital Wild West: Regulating the Explosion of Initial Coin
Offerings", Tennessee Law Review, Vol. 85, n. 4, 2018, pp. 897-960.
Rohr, J.,
Aaron, W., "Blockchain-based Token Sales, Initial Coin Offerings, and =
the
Democratization of Public Capital Markets", Hastings Law Journal, vol.=
70,
no. 2, 2019, pp. 463-524.
Ryan, R., &=
amp;
Donohue, M., "Securities on blockchain", The business lawyer, Vol.
73, 2017, 2018, pp. 85-108.
Shoeb, M.,
"World's first gold-backed digital e-token launched", 20 March 20=
19. Available
at: https://the=
peninsulaqatar.com/article/20/03/2019/World%E2%80%99s-first-gold-backed-dig=
ital-e-token-launched (Last visi=
t,
14 February 2022).
Shrestha, P., Arslan-Ayaydin, O.,
Thewissen, J., & Torsin, W., "Institutions, regulations and initial
coin offerings: an international perspective", 2020, pp. 1-46. Availab=
le
at: https://www.researchgate.net/publication/344632580_Institutions=
_regulations_and_initial_coin_offerings_An_international_perspective/link/5=
f85be34a6fdccfd7b5d04dc/download (Last visit, 13 February 2022).
Steverding,=
F.,
& Zureck, A., "Initial coin offerings in Europe - The current legal
framework and consequences for investors and issuers ", pp. 1-63. Avai=
lable
at: https://www=
.researchgate.net/publication/340023639_Initial_Coin_Offerings_in_Europe_Th=
e_Current_Legal_Framework_and_its_Consequences_for_Investors_and_Issuers (Last visi=
t,
15 February 2022).
Subarkah, I=
.,
"Initial coin offering (ICO) in perspective law of sharia business&quo=
t;,
Al-Ahkam, Vol. 30, n. 1, 2020, pp. 1-18.
Tashea, J.,
"New money", American Bar Association journal, Vol. 104, n. 3, 20=
18,
pp. 56-63.
Trotz, E.,
"Tangled up in blue: adapting securities laws to initial coin
offerings", Northern Illinois university law review, Vol. 39-3, 2019, =
pp.
428-544.
Wis, A.,
"Initial coin offering as a funding source for projects", ACC
journal, Vol. 25, I. 2, pp. 90-98.
B- Legal articles in French
François, B., "Les offres au public des jetons (Initial coin offer=
ings
- ICO) en droit français et en droit comparé", In Blockchain et droit =
des
sociétés, Dalloz, 2019, pp. 61-75.
Guionnet-Moalic, C., & Dubois, M., "Le b.a.-ba sur l'ICO (init=
ial
coin offering) et sa fiscalité", La semaine juridique Générale, n. 43,
2019, pp. 1924-1925.
Houben, R., "Initial coin offerings (ICOs)", Revue de droit
bancaire et financier, n. 4, 2019, pp. 1-3.
Laprade, F. M., "Premier encadrement des ICO en France: étude
pratique", In Blockchain et droit des sociétés, Dalloz, 2019, pp. 77-8=
3.
Legeais, D., Blockchain, Fascicule 534, Jurisclasseur Commercial, 2020.=
Le Guen, J., "Tokenisation et crypto-actifs: Relaite plurielle et
enjeux de qualification", Cahiers de droit de l'entreprise, n. 6, 2021,
pp. 22-28.
Renoux, V., Bernard, S., "Crypto-monnaies et initial coin offering= s: voyage en terre inconnue", Revue de droit fiscal, n.5, 2018, pp. 1-7.<= o:p>
Reygrobellet, A., "Projet de loi Pacte: les aspects intéressant le
droit des affaires", La semaine juridique Notariale et immobilière, n.=
27,
2018, pp. 597-598.
=
III
- Judgments and decisions
-
328 U.S. 293 (1946).
[1] W. Fitts,
"Initial Coin Offerings: Getting Rid of the Venture Capitalist", =
The
Tennessee Journal of Business Law, Vol. 20, n. 2, 2019, p. 927.
[2] M. Dell'Er= ba, "Initial Coin Offerings: The Response of Regulatory Authorities",= New York University Journal of Law and Business, Vol. 14, n. 3, 2018, p. 1117.<= o:p>
[3] I. Oren,
"ICO's, DAO's, and the sec: A partnership solution", Columbia
business law review, Vol. 2, 2018, p. 620.
[4] R. Ryan, &=
amp;
M. Donohue, "Securities on blockchain", The business lawyer, Vol.=
73,
2017, 2018, p. 85.
[5] F. M. Laprade, "Premier encadrement des ICO en France: étude
pratique", In Blockchain et droit des sociétés, Dalloz, 2019, p. 77.
[6] P. Momtaz,
"Initial coin offerings", 2020, p. 1. Available at:
https://www.researchgate.net/publication/341555998_Initial_Coin_Offerings/l=
ink/5ecbc5dd299bf1c09add4646/download
(Last visit, 13 February 2022).
[7] J. Moran,
"The impact of regulatory measures imposed on initial coin offerings in
the United States market economy", the catholic university journal of =
law
and technology, Vol. 26, n. 2, 2018, p. 215.
[8] M. Mendels=
on,
"From initial coin offerings to security tokens: A U.S. federal securi=
ties
law analysis", Stanford technology law review, Vol. 22, n. 1, 2019, p.=
57.
[9] C. Guionnet-Moalic, & M. Dubois, "Le b.a.-ba sur l'ICO (initi=
al
coin offering) et sa fiscalité", La semaine juridique Générale, n. 43,
2019, p. 1924.
[10] M. Ozeysil,
"Initial coin offerings (ICOs): a comprehensive review on start-up
firms", Pearson journal of social sciences and humanities, Vol. 6, I. =
6,
2020, p. 285.
[11] Initial co=
in
offerings (ICOs) for SME financing, OECD, 2019, p. 32. Available at:
https://www.oecd.org/finance/ICOs-for-SME-Financing.pdf (Last visit, 15
February 2022).
[12] P. Shresth=
a,
O. Arslan-Ayaydin, J. Thewissen, & W. Torsin, "Institutions,
regulations and initial coin offerings: an international perspective",
2020, p. 8. Available at:
https://www.researchgate.net/publication/344632580_Institutions_regulations=
_and_initial_coin_offerings_An_international_perspective/link/5f85be34a6fdc=
cfd7b5d04dc/download
(Last visit, 13 February 2022).
[13] Ozeysil, o=
p.
cit., p. 288.
[14] E. Trotz,
"Tangled up in blue: adapting securities laws to initial coin
offerings", Northern Illinois university law review, Vol. 39-3, 2019, =
p.
434.
[15] P. Maume, =
&
M. Fromberger, "Regulations of Initial Coin Offerings: Reconciling U.S.
and E.U. Securities Laws", Chicago Journal of International Law, Vol. =
19,
n. 2, p. 560.
[16] B. François, "Les offres au public des jetons (Initial coin offer=
ings
- ICO) en droit français et en droit comparé", In Blockchain et droit =
des
sociétés, Dalloz, 2019, p. 63.
[17] F. Steverd=
ing,
& A. Zureck, "Initial coin offerings in Europe - The current legal
framework and consequences for investors and issuers ", p. 21. Availab=
le
at: https://www=
.researchgate.net/publication/340023639_Initial_Coin_Offerings_in_Europe_Th=
e_Current_Legal_Framework
and_its_Consequences_for_Investors_and_Issuers (Last visit, 15 February 202=
2).
[18] ICOs, op.
cit., p. 14.
[19] Ibid., p. =
18.
[20] Ozeysil, o=
p.
cit., pp. 286-287.
[21] A. Wis,
"Initial coin offering as a funding source for projects", ACC
journal, Vol. 25, I. 2, p. 94.
[22] Ozeysil, o=
p.
cit., p. 288.
[23] I. Subarka=
h,
"Initial coin offering (ICO) in perspective law of sharia business&quo=
t;,
Al-Ahkam, Vol. 30, n. 1, 2020, p. 11.
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