Liechtenstein, a small principality located between Switzerland and Austria, has recently updated its blockchain laws to better align with the rapidly evolving cryptocurrency landscape. This move positions Liechtenstein as one of the most crypto-friendly countries in the world, attracting blockchain-based companies and investors seeking a supportive regulatory environment.
According to a published draft law, it was revealed that Lichtenstein is the first country to develop a comprehensive regulation of the token economy. Meanwhile, the country’s parliament passed the Token and Trusted Technology Service Provider Act (also known as TVTG or the Liechtenstein Blockchain Act). The call for tighter regulations is due to concerns over money laundering, consumer protection, market stability, and illicit activities such as tax evasion and fraud.
Key Features of Liechtenstein’s Updated Blockchain Laws
Blockchain laws aim to provide legal certainty for businesses operating in the cryptocurrency space while also promoting innovation and protecting consumers.
Additionally, the key feature of the new law is the introduction of a comprehensive regulatory framework for blockchain-based businesses, covering everything from initial coin offerings (ICOs) to digital asset custody.
Under the new regulations, firms that wish to conduct an ICO must obtain regulatory approval from the Liechtenstein Financial Market Authority (FMA). Also, they must comply with the strict disclosure requirements. Likewise, organizations that provide custody services for digital assets must comply with specific security standards and meet capital requirements to ensure the safety of their client’s assets.
Furthermore, Lichentensteain’s updated blockchain laws recognize the legal validity of security tokens, which are digital tokens that represent ownership of assets or companies. It also provides a clear legal framework for security tokens, making it easier for companies to issue and trade them. In return, the move will attract more investment into the country and provide a boost to its economy, thereby positioning itself as a leader in the cryptocurrency space.
Recall that a few months ago, Jake Chervinsky, the general policy officer at Blockchain Association shared his reviews on the happenings in the crypto industry. He listed out some things that can be done by investors and exchanges to reduce the current attack posed by the regulators as well as advance better policies for the crypto industry at large.
