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Key Requirements for Crypto-Asset White Papers

11/16/2024 • Ekaterina Anthony, Viktor Solomon
Key Requirements for Crypto-Asset White Papers
Ekaterina Anthony
by Ekaterina Anthony
Viktor Solomon
by Viktor Solomon

Under MiCA, any issuer offering non-asset-referenced tokens or utility tokens must provide clear and comprehensive information in their white papers, covering aspects such as issuer identity, project goals, technology, and risks. This ensures that investors have the details they need to make informed decisions. The disclosures must include:

  • • Information about the Issuer: Name, legal details, management structure, and business activities.

  • • Project Information: Overview of the project’s purpose, past achievements, milestones, and use of funds.

  • • Token Details: Type of token, its utility, and any additional rights or obligations.

  • • Risks: Description of risks associated with the technology, issuer, and project implementation.

This checklist should be placed at the start of every white paper, followed by detailed explanations in the main sections.

Links to Key Regulations

Here are direct links to the official EU regulations and directives mentioned in MiCA:

Major EU Regulators Overseeing MiCA Compliance

The implementation of MiCA is supported by several major European regulatory bodies, which oversee different aspects of financial and digital asset markets:

  • • European Securities and Markets Authority (ESMA): Oversees securities markets, including crypto-assets when offered to the public or traded on a platform.

  • • European Banking Authority (EBA): Supervises financial institutions, providing guidance for crypto-asset service providers regarding anti-money laundering (AML) and consumer protection.

  • • European Central Bank (ECB): Monitors the impact of crypto-assets on financial stability and payment systems within the EU.

MiCA White Paper Compliance Checklist

Below is a detailed checklist to help ensure your white paper meets all MiCA requirements. Each item in this table represents a disclosure that must be included to comply with MiCA, ensuring clarity and transparency for investors.

Section

Example Detail/Description

Included in White Paper? (Yes/No)

Information about the Offeror/Issuer

Name of the issuer

XYZ Crypto Ltd.

Legal form and registered address

Private Limited Company, 123 Blockchain Rd, EU

Date of registration

Registered on 01/01/2022

Legal Entity Identifier (LEI) or other identifier

LEI: 1234567890ABCDEFG

Details of the parent company (if applicable)

Parent: ABC Fintech Holdings

Identities of the management body members

CEO: John Doe; CTO: Jane Smith

Business activities of the issuer or parent company (if applicable)

Software Development, Blockchain Services

Information about the Project

Name of the project and crypto-assets

XYZ Token Project

Description of the project

A platform for decentralized digital identity verification

Key personnel and advisors involved

Lead Developer: Alex Johnson; Advisor: Dr. Maria Gomez

Planned milestones

Beta launch in Q1 2025, full release Q3 2025

Past achievements

Alpha version deployed with 1,000 users

Resource allocation

70% for platform development, 20% for marketing, 10% for legal/compliance

Use of funds raised

To enhance the development and scaling of XYZ Token platform

Offer to the Public

Clarification if it's an offer or admission to trading

Offer to the public on EU exchanges

Reasons for the offer

Raise funds for further R&D and market expansion

Fundraising targets

EUR 5 million target

Pricing and subscription details

EUR 0.10 per token, minimum purchase 100 tokens

Targeted investor profiles

Retail and accredited investors

Distribution of tokens

Initial allocation: 50% to public, 20% to team, 30% for reserves

Crypto-Asset Characteristics

Type and functionality of the crypto-asset

Utility token used for accessing identity verification tools

Classification data (utility, governance, etc.)

Utility token

Planned future functionalities

Voting rights for token holders in platform decisions by 2026

Rights and Obligations

Rights and obligations of token holders

Access to XYZ services, potential voting rights

Conditions for exercising rights

Token holders must hold at least 500 tokens to vote

Modifications to rights

The company reserves the right to amend token use cases with prior notice

Future public offers

Future fundraising events anticipated in 2026

Transferability restrictions

Tokens non-transferable for the first 6 months post-purchase

Redemption or burn mechanisms

5% of tokens to be burned annually to reduce supply

Underlying Technology

Details of the distributed ledger or blockchain technology used

Built on Ethereum blockchain

Consensus mechanism

Proof of Stake (PoS)

Transaction validation incentives

Validators rewarded in XYZ tokens

Technical audits conducted

Audited by SecureSmart Blockchain Auditors in 2023

Risk Factors

Technology-related risks

Risk of smart contract bugs or vulnerabilities

Issuer-related risks

Risk of insufficient funds to complete project

Offer or admission risks

Regulatory changes impacting token utility

Project implementation risks

Risk of delayed roadmap milestones

For compliance with MiCA standards and to further enhance transparency, it is recommended that the white paper also be made machine-readable. This means structuring the document in a format that can be easily processed by computers, such as XML, JSON, or another structured data format. A machine-readable format allows regulatory bodies, data analysts, and investors to quickly access and verify information, facilitating automated compliance checks and streamlining data collection.

By following this checklist, crypto-asset issuers can enhance their transparency and compliance, reinforcing the trust of their investors while aligning with MiCA’s goals of fostering a robust and regulated European crypto market.

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