Token Alliance Releases 2019 Edition of Best Practices Guide For Digital Tokens: O’Melveny Lawyers Serve As Expert Contributors
August 14, 2019
As US and international regulation of digital tokens evolves, token issuers and trading platforms continue to lack clarity on how to ensure compliance with a developing legal framework. Recognizing this uncertainty, the Token Alliance, an industry-led initiative of the Digital Chamber of Commerce, released the Second Edition of “Understanding Digital Tokens: Considerations and Guidelines for Securities and Non-Securities Tokens.”
The Second Edition updates the First Edition’s guidelines for the issuance and sale of tokens that are not intended to be regulated as securities (so called “utility tokens”) and, for the first time, provides legal considerations and guidelines for token sponsors and token trading platforms that are engaged with tokens that are considered securities under US securities laws. The report is intended to encourage a healthy dialogue among regulators, token issuers, and other actors about the responsible promotion and regulation of token offerings.
A global working group of experts from throughout the blockchain ecosystem contributed to the report, including O’Melveny’s Eric Sibbitt and Steve Bunnell, whom the Token Alliance named expert contributors. O’Melveny is a member of the Token Alliance.
The best practices reflected in the report do not carry the weight of law or constitute specific legal advice, but may be helpful for prospective token issuers and associated parties, in consultation with their legal counsel and other advisors.