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Companies and projects have increasingly relied on the sale of digital assets, or tokens, as a means of fundraising. These tokens generally do not grant the holders an ownership interest in the issuing company or project, but may provide governance rights, access rights or other utility. This has been conducted through public sales known as initial coin offerings (ICOs), proliferation through token generation events (TGEs) or private sales, among other mechanisms. While showing characteristics of traditional methods of fundraising, there are a range of unanswered questions related to the legal classifications of such products. As ICOs and TGEs will usually be distributed online and internationally, there is usually no single legal framework applying to such transaction, and the legal framework of each market in which the tokens may be offered or sold needs to be considered.
Introduction
Attitude of the country towards ICOs/token sales
ICOs and tokens remain widely unknown. To the best of our knowledge no official data on frequency of use of ICOs and tokens is available.
Legal affairs
Presence of any explicit regulation on ICOs and the issuance of token/coins
Croatian legislation does not regulate crypto assets. However, taxation and other financial regulations may nevertheless apply.
As already mentioned under Section f.iii, the proposed MiCA Regulation should regulate crypto assets in general, including ICOs and tokens.
Presence of any explicit restrictions on ICOs or the issuance, distribution and/or transfer of token/coins
Considering that coins and tokens are not considered either as securities or currency, it seems that no restrictions currently apply thereto.
Obligations and requirements to issue token/coins
N/A.
Classification of token/coins in the jurisdiction
N/A.
Presence of a duty to publish a prospectus bevor offering token/coins to investors
N/A.
Presence of AML/KYC requirements that are needed to be fulfilled regarding (i) the initial issuance of token/coins and (ii) any following transfer of token/coins to third parties
N/A.
Additional comments regarding (i) the legal situation for ICOs/token/coins and (ii) any following transfer of token/coins to third parties
The European Commission proposed a new legislative framework including the Proposal for a Regulation on a pilot regime for market infrastructures based on distributed ledger technology, which should cover issuance and trading of crypto assets (expected to be adopted in 2022).
Economic conditions
Market size for ICOs/token sales and existence of any previous regulated ICO/token sales in the jurisdiction
To the best of our knowledge no official data relating to ICOs and tokens is available.
Additional comments regarding the economic situation for ICOs/token sales or what companies must be aware of in this business area
N/A.