Crypto Launchpads – Legal Structure
Starting crypto launchpads: ensure that you are operating within the law. Discover our legal and compliance assistance services.
Legal experts in designing solutions for crypto licensing worldwide.
Content writer and localization specialist with 3+ years of experience with leading companies in the cryptocurrency and FinTech sectors.
Legal Solutions for Crypto Launchpads
We know it can be scary to launch a crypto project, especially given how complex the legal landscape is. LegalBison is here to guide you and ensure that your crypto launchpad is both compliant and successful. From initial assessments to crypto licenses, our expertise covers all essential parts of your legal processes. Our goal is to make your life simpler so you can focus on what matters: creating a successful project and growing your community.
Legal Assessment of a Crypto Launchpad
To help you launch your crypto launchpad legally, the first step our team will take is assessment. We’ll begin by examining the operational framework of your launchpad, but also the projects it aims to promote. Our team of experienced lawyers will then identify all applicable regulations and outline the steps you need to achieve full compliance. If you’re based in Europe for example, you’ll receive detailed guidance so you can adhere to MiCa’s regulations as well as AML and KYC requirements. With this approach, you’re certain to avoid legal issues in the future thanks to a launchpad that operates within the right legal framework since day one.
Drafting the Legal Documents of a Crypto Launchpad
Proper documentation is essential to comply with crowdfunding, crypto, intellectual property, and the General Data Protection Regulation (GDPR). LegalBison’s team can create and prepare all documents that you will need to meet regulatory standards. This would include drafting terms and conditions, privacy policies, and agreements depending on your project’s needs. In that sense, documentation has two main goals: safeguarding your launchpad but also building its credibility.
Company Registration for a Crypto Launchpad
The type of legal entity chosen by a business is very critical. This impacts liability protection, compliance, and operational efficiency. We at LegalBison will guide you through incorporation processes for services like liability protection and a formal business presence. If your launchpad is catering to several jurisdictions, you could definitely benefit from our advice. We can help you incorporate your launchpad in the best region so you can optimize tax obligations while complying with international laws. This step is vital for a launchpad that’s both trustworthy and sustainable.
Licensing Requirements for a Crypto Launchpad
If you want to gain the trust of your community, you’ll have to get the necessary licenses. At LegalBison, we can help you secure a crypto license and/or a crowdfunding license easily. This way, you’ll be able to protect your launchpad’s reputation, legitimize your activity, and attract both high-quality projects and serious investors. Of course, proper licensing also ensures compliance with legal standards, reducing the risk of fines and legal issues.
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Quick set-up and straightforward process. It was a smooth process, we are happy to have chosen LegalBison as our Partner for incorporations, globally.
Legal Key Points for Crypto Launchpads
Creating a launchpad for crypto isn’t just about innovative tech and promising tokens. It’s also about making everyone feel safe. From lawmakers and project teams to investors and banks, your launchpad must instill confidence across the board. Here’s why that’s crucial and how LegalBison can help you.
- Fundraising
- Security Tokens
- Compliance
- Legal Entity
Raising Funds
Respecting AML and KYC protocols is a must when you’re planning to launch your own crypto launchpad. In that sense, being aware of the policies that apply to your jurisdiction will be essential for the success of your project. Unfortunately, it’s often easier said than done: each jurisdiction has its own requirements. That’s why understanding the regulations that apply where you plan to operate is extremely important. For example, if you’re planning to launch your launchpad in Europe, the EU’s Markets in crypto-assets regulation, which you might know as “MiCA”, requires that all crypto service providers implement AML/KYC procedures and obtain licenses so they can operate.
Once you’ve got a good understanding of how you’ll manage AML and KYC processes, you’ll have to make your first important decision: raising funds in fiat or crypto. Bearing in mind that either solution comes with its own set of regulatory considerations. Raising funds in fiat involves respecting traditional financial regulations, which often require more extensive and complex documentation. Typically, you would have to obtain licenses from financial regulatory authorities and allow all your financial transactions to be easily traceable. On the other hand, raising funds with crypto can be more flexible, but comes with its own challenges. If you’re choosing to go that route, you’ll have to care about more complexity, as you’ll have to navigate a more ambiguous legal landscape and manage crypto volatility.
One of the most popular ways to raise funds for a crypto project is to opt for an Initial Coin Offering (ICO). Basically, ICOs allow new projects to sell their tokens directly to investors, before the official launch of a token, app, coin, or even service. Initial coin offerings were particularly popular in 2017-2018, where crypto investors who would buy tokens early would do so, hoping that the tokens would increase in value later on. Unfortunately, ICOs from this period were also a breeding ground for many deceptive - and sometimes straight-up scammy - projects. As a response, launchpads emerged, and are now considered a much safer alternative to ICOs. Popular platforms like Binance Launchpad, for instance, make sure that any project that they promote for their users meets the legal standards before they’re allowed to raise funds.
Dealing with Security Tokens
Security tokens are important for many GameFi launchpads, offering both investment opportunities and regulatory challenges. You most likely don’t know yet if securities will apply to your launchpad project. But even so, having a plan in mind for securities tokens is an important step to take. Security tokens are digital assets that use blockchain technology to represent ownership or stakes in real-world assets, such as equity, debt, or even real estate. But most importantly, because of their nature, they are treated like traditional financial securities. Now, issuing securities without proper authorization is illegal virtually everywhere in the world. Getting legal statements might be a good idea to make sure the tokens your launchpad issues are of the right type.
Even if your initial plan doesn't include any security tokens, you might find that regulatory bodies classify some of your tokens as securities. This is particularly relevant for launchpad ICOs, where tokens can easily fall under securities laws. For example, in the case of the US, the SEC has required any token resembling a security to comply with the Securities Act of 1933. On the other hand, the European Securities and Markets Authority interpreted that any token resembling a financial instrument in Europe should be consistent with the Markets in Financial Instruments Directive, which means getting licenses and authorizations as an investment firm.
At LegalBison, our job is to guide you through these complexities. We will check whether your tokens can be treated as securities or not, and structure the offering in a way to make it remain compliant. It involves drafting legal documents, compliance with AML and KYC procedures, and guiding on licensing procedures. This approach ensures that your launchpad is compliant and trustworthy.
Compliance with Crypto Regulations
When running a crypto launchpad, compliance with AML and KYC regulations is non-negotiable. The protocols are aimed at preventing fraudulent activities and building trust with regulators, investors, and users.
AML laws’ objective is simple: it aims to stop criminals from using crypto to launder money. Although, contrary to popular belief, only 1% of all money laundering is carried out using cryptocurrencies. This involves implementing measures to detect and report activities deemed suspicious. On the other hand, KYC regulations are meant to check the identity of your users to prevent fraud and/or identity theft. Normally, KYC verification includes information such as someone's legal name, official ID, and proof of address. KYC has become a standard of security in the crypto world and is already well-known by most users.
Non-compliance can attract very severe penalties and pretty dramatic consequences. For example, Bittrex was fined over 53 million dollars when it failed to comply with AML laws in 2022. Surely, you don't want this to happen to you. LegalBison is here to help you make sure that your launchpad stays compliant and secure.
Legal Entity
Choosing the right legal structure for your launchpad will enable you to build a solid foundation for your project. This choice will impact your legal protection, your launchpad’s compliance, and your overall day-to-day efficiency.
Most of the time, choosing a corporation will be most advantageous. Indeed, incorporating your launchpad prevents your business assets from impacting your personal assets. In practice, it means that in case your launchpad ever faces legal or financial issues, you’re certain to stay protected and safe. Moreover, a corporation can help you be more credible to investors, as it gives your business a formal and official entity. Corporations are required to keep detailed financial records and to go through audits, and this transparency usually comes with more trust. Moreover, on a more practical side, a corporation could also mean tax benefits, depending on your jurisdiction.
The more innovative and decentralized governance structure used with crypto-related projects is that of a Decentralized Autonomous Organization or DAO. Simply put, it's like a charity or an association running on blockchain technology: DAOs operate with smart contracts, and there isn't a central governing body. While this might sound attractive at first glance, a DAO also means more regulatory uncertainties and potential liability issues. Even though DAOs are praised in the crypto community for their democratic nature, the lack of legal recognition might make things more complicated (and potentially more dangerous) than they should be.
Start Your Crypto Launchpad from the Safe Side
Starting a crypto launchpad is a lot of work that requires skills and dedication to plenty of different elements at once.
LegalBison will gladly manage all the legal and administrative matters on your behalf, so you can focus on what is important: development and business.
Contact us now and get in touch with a consultant to assess what we can do for you and your project.
Guiding questions to properly start and operate a crypto launchpad
Our legal team has formulated the following questions to guide you in your effort to build the legal side of your crypto launchpad.
Crypto Launchpad Package
Get your crypto launchpad on the right track from the get-go with our full legal package, including a company, assistance in opening a bank account, necessary licenses for your specific project (crowdfunding, crypto), and all the mandatory and advisable legal documents.
Inquire now to speak with a consultant about your unique project.
FAQ about crypto launchpads
Once you’ve got a good idea of what you want your launchpad project to be like, you’ll probably want to have a look at compliance and regulations.
Obviously, unless you’re a crypto lawyer yourself, seeking legal advice should be the next step. LegalBison can guide you through the whole process, from your launchpad’s structure to compliance with the laws that apply to your project.
It’s not easy to pinpoint which license you’ll need for your crypto launchpad without having more extensive information regarding your project.
Indeed, the licenses required depend on your jurisdiction and the activities of your platform. Generally, though, you might need a crypto license, a crowdfunding license, and perhaps a securities-related license. Either way, LegalBison’s role is to help you obtain the licenses you need for your launchpad.
The cost to start a crypto launchpad varies significantly based on factors such as the complexity of the platform, legal fees, and licensing costs.
It’s important to budget for these elements. Thankfully, this can be done easily if you ask the right professionals. LegalBison’s experts can give you a cost breakdown of the costs involved, depending on your needs. This way, you won’t have to worry about nasty surprises.
LegalBison offers a large variety of services to assist you when setting up your crypto launchpad. We handle everything from legal assessments and document preparation to company formation and obtaining licenses. Put simply, our goal is to have your launchpad live and comply fully with the law.
Yes, your crypto launchpad can issue a Security Token Offering (STO), but only if it possesses the proper license and authorization. Compliance with securities regulation can get tricky. Thankfully, LegalBison can help you secure the rights and licenses to do STOs legally.
Get in touch with our experts
Have a question regarding the legal aspects of your upcoming crypto launchpads?
Our team is available within 24 business hours of leaving a request to answer your questions and provide you with concrete information and cost.
Legal experts in designing solutions for crypto licensing worldwide.
Content writer and localization specialist with 3+ years of experience with leading companies in the cryptocurrency and FinTech sectors.