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LCX Regulatory Strategy And Process

LCX Regulatory Strategy And Process

LCX is engaging constantly with regulators on our mission to establish a compliant and regulated blockchain ecosystem. On this path LCX has received a business license for crypto trading in November 2018 and increased the share capital from 100‘000 CHF to 1‘000‘000 CHF. The Information the FMA published on Sept 5th 2019 summarizes our status quo correctly. 

All current product offerings of LCX are operated under the current regulatory structure. Furthermore LCX is in the process of preparing to apply in several consecutive steps for a security trading OTF/MTF Licence under MIFID II and other licenses according to the Liechtenstein Law.

These licenses would allow LCX to further expand its offering with regulated services and products with the long-term vision to become a blockchain bank in the future.

***Update***

On 3rd of October 2019, the Liechtenstein Parliament passed the Token and Trusted Technology Service Provider Act (TVTG) – also known as the “Blockchain Act.” The new blockchain laws are in force since 1st of January 2020.

Cryptocurrency exchanges which are matching the buying and selling interests (Matched-Principal-Trading; multilateral) with regard to utility tokens against fiat and/or crypto are deemed unregulated and only require a trade license with the Office of Economic Affairs (Amt für Volkswirtschaft) for conducting an operating business. LCX AG has receive this trade license back in November 2018.

Starting first of January 2020, pursuant to Article 12 TVTG, natural and legal persons who have a registered office or place of residence in Liechtenstein and who wish to provide one of the following services on a professional basis in Liechtenstein must register with the FMA:

  • Token Issuers:  Persons publicly offering tokens on behalf of third parties. This includes, for example, trading venues that carry out ICOs for their clients. Additionally, persons carrying out a private issuance must also register if the value of the tokens sold in one year exceeds or will exceed CHF 5 million;
  • Token Generators: Persons who create original tokens on behalf of third parties;
  • TT Key Depositaries and TT Token Depositaries:  Persons who safeguard tokens or private keys for third parties, e.g. in a safe or a collective wallet. This also includes the execution of transactions for third parties. These services are typically provided by crypto exchanges or wallet providers;
  • TT Protectors: Persons who hold tokens on TT systems in their own name on account of third parties (note: a licence under the Professional Trustees Act is obligatory in this case);
  • Physical Validators: Persons who ensure the enforcement of rights in accordance with the agreement, in terms of property law, to goods represented in tokens on TT systems.
  • TT Exchange Service Providers: Persons who exchange legal tender for tokens and vice versa as well as tokens for tokens. Typically this includes ATMs at which cryptocurrencies can be exchanged, but also persons who offer exchanges against their own book exclusively online;
  • TT Verifying Authorities: Persons who verify the legal capacity and the requirements for the disposal over a token. This includes, for example, services that ensure that only persons of legal age or those with a specific authorisation can purchase certain tokens;
  • TT Price Service Providers: Persons who provide TT system users with aggregated price information on the basis of purchase and sale offers or completed transactions.  This includes persons who publish independently calculated prices for tokens.
  • TT Identity Service Providers: Persons who identify the person in possession of the right of disposal related to a token and who record it in a directory.  
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