- The Use Case: Verida
- Utility Tokens vs Other Digital Assets
- Jurisdictional Considerations
- Overview of Low-Compliance Jurisdictions
- Overview of Highly Regulated Jurisdictions
- Further Guidance
Annex I: Jurisdictions for Existing DLT Platforms
- About this Document
The Use Case: Verida
Verida is a NEAR Protocol project based in Singapore that provides a blockchain-based data solution, where user data is privately and consensually utilized to create new products and services.
Similar to how the decentralized finance movement is transforming traditional finance, Verida provides the technology and tools to transform websites and applications used every day by billions of people across the globe.
This Use – Case covers Verida’s research request on regulatory environments for a “token issuance entity”, given they seek to issue a utility token.
Further questions raised by Verida and answered throughout the Use – Case and in Section 7 include:
- What jurisdiction offers a clear and effective regulatory environment to conduct an initial token offering?
- What token launch style (initial centralized exchange offering vs initial decentralized exchange offering) would best align with that recommended jurisdiction?
- What are the best practice and required disclosures to make in regard to an initial token offering?
- Post token launch, what are the best practices for a project to ensure the token is used for its intended purposes?
Utility Tokens vs Other Digital Assets
Colloquially, the phrase “Utility Token” is a catchall term used to capture tokens that are explicitly not: i.) a “security” (a term that has many different definitions depending on the jurisdiction), or ii.) a “payment token”. Instead, as the name suggests, utility tokens, one variety of digital/virtual/crypto assets, offer some kind of “utility” to the token’s holder, often in the form of providing the token holder with access to services or a platform. In simplest terms, they are akin to a digitally transferable arcade token that must be used to access/play the arcade’s games.
"The Legal Guild has provided detailed research and analysis of the regulatory environment for tokens across various jurisdictions. This has been a valuable insight to Verida to augment our internal compliance practices as we grow and build out the Verida network. With a fast-changing regulatory environment, this playbook will be invaluable for other projects looking to best understand regulatory obligations and best practices for their project too"