Key points
- The ICO white paper sets out the relationship between the project team, investors and the blockchain ecosystem, and must ensure legal compliance.
- The EU MiCA Regulation sets the content of the white paper and requires it to be notified to the competent authority; the former optional AMF visa introduced by the PACTE Law has been repealed.
- The regulations require clear information on the nature of the tokens, their utility and the risks inherent in this type of investment.
- How a token is classified depends on its characteristics, not on the wording of the document; incomplete or misleading information gives rise to the liability of the offeror and its management.
- The white paper must include a detailed description of the product, the governance, the timetable and a “legal information” section identifying the issuing legal entity.
- Risk factors, in particular the volatility of digital assets, must be presented comprehensively and understandably.
Drafting a white paper is a decisive step when launching an initial coin offering (ICO). This document sets out the relationship between the project team, potential investors and the wider blockchain ecosystem. Ensuring legal compliance while promoting the ICO remains essential to limit the regulatory risks associated with cryptocurrency law. The requirements of ICO regulation call for increased vigilance from project sponsors on the content of the white paper, both in terms of transparency and legal certainty.
What regulatory requirements apply to white papers?
The legal framework applicable to ICOs is gradually becoming clearer, both in France and at European level. Understanding these requirements makes it possible to structure the presentation of the project without omitting mandatory information, while avoiding making the document unnecessarily heavy.
The EU MiCA Regulation (Regulation (EU) 2023/1114) sets the content of the white paper, referred to as a “crypto-asset white paper”: information on the offeror, the issuer, the project, the offer, the rights and obligations attached to the crypto-asset, the technology, the risks and the climate impacts (Article 6). The offeror must be a legal person and must notify the white paper to the competent authority, the AMF (Autorité des marchés financiers) in France, at least 20 working days before its publication, without prior approval (Articles 4 and 8; Article L. 552-2 of the French Monetary and Financial Code (Code monétaire et financier) (in French)). The optional AMF visa created by the PACTE Law no longer exists: Order (ordonnance) No. 2024-936 of 15 October 2024 rewrote Articles L. 552-1 to L. 552-3 of the Monetary and Financial Code, which now refer to MiCA, and repealed Articles L. 552-4 to L. 552-7.
How does ICO regulation affect white paper drafting?
ICO regulation mainly aims to prevent misleading or fraudulent practices. It requires clear information on the nature of the tokens, their practical utility and the risks inherent in this type of investment. A precise product description limits any ambiguity. How a token is classified, however, depends on its characteristics, not on the wording of the document: a crypto-asset that qualifies as a financial instrument falls outside the scope of MiCA (Article 2(4)) and is governed by the rules on financial securities.
Incomplete, unfair, unclear or misleading information gives rise to the liability of the offeror and the members of its management body towards holders, and any clause excluding this liability has no effect (Article 15 of MiCA). It also carries a risk of administrative sanctions. Including the disclosures required by cryptocurrency law builds trust in the project and contributes to the legal certainty of the transaction.
Why involve a lawyer in promoting the ICO?
The role of lawyers is not limited to reviewing existing legal documents. Their involvement from the design of the white paper content helps ensure that the information presented is accurate and consistent. They adapt the drafting to French and European regulatory specifics.
An ICO lawyer (in French) can assist you from the preparatory phase of your transaction.
The rules vary between jurisdictions and the scope of financial law changes regularly. Support from a lawyer contributes to the legal certainty of the transaction for all parties and helps prevent later disputes.
How do you make the white paper legally sound?
Producing a legally sound white paper requires a rigorous and structured approach. The document reflects both the technical complexity of the project and the aim of protecting investors’ interests. Meeting this dual requirement calls for method, anticipation and a command of the legal issues specific to the crypto-asset sector.
Several technical and legal points require attention. They concern the overall structure of the document and the accuracy of the financial or strategic data provided to the target audience.
What should a white paper contain?
A compliant white paper always includes a detailed description of the product, setting out its added value, its use cases and how the proposed tokens work. It also specifies the governance, the technical arrangements and the implementation timetable. A transparent presentation of the business model strengthens the credibility of the issue.
The “legal information” section plays a central role. It identifies the issuing legal entity, the conditions for acquiring the tokens and their precise use, and explicitly states the risk factors, in particular those linked to the volatility of digital assets. The first page states that the white paper has not been approved by any competent authority and that the offeror is solely responsible for its content (Article 6(3) of MiCA).
Must the risks be set out explicitly for legal compliance?
In the current context of cryptocurrency law, financial, technical and regulatory risks should be presented comprehensively and understandably. The white paper states in particular that the crypto-asset may lose all or part of its value, may not always be transferable and may not be liquid; it contains no assertion about its future value (Article 6(4) and (5) of MiCA). Describing liquidity limits, the possibility of total loss and speculative assumptions demonstrates the team’s commitment to transparency.
This approach limits the risk of breaching the duty to inform and of civil liability claims. It also strengthens the robustness of the ICO promotion vis-à-vis the competent authorities.
What recommendations should you follow to improve white paper drafting?
Striking a balance between clarity, technical detail and legal compliance requires adjusting the level of detail to the nature of the offer and its target audience. Applying readability standards makes the document easier to understand, limiting any risk of unfavourable interpretation by the authorities.
Writing in accessible language, while respecting professional terminology, meets the requirement for a concise and understandable presentation (Article 6(2) of MiCA). Involving different contributors – engineers, lawyers, financial experts – improves overall consistency and makes it possible to address every aspect of ICO regulation and market expectations.
How can you anticipate regulatory changes affecting legal certainty?
Token regulation and the rules on digital offerings are changing fast. Including in the white paper a clause on adapting the project to new legal frameworks in the future shows a responsible and proactive stance. Highlighting the commitment to comply on an ongoing basis with newly adopted requirements reaffirms the team’s seriousness to investors and authorities.
Setting up a legal monitoring process allows the organisation to update its procedures and messaging quickly if regulations so require. Maintaining this momentum has a lasting influence on how reliable the project is perceived to be and preserves its legal certainty.
How important is traceability in white paper drafting?
Archiving, supporting documentation and tracking the versions produced are essential practices. In the event of an inspection, these measures make it easier to demonstrate that the steps needed to validate initial legal compliance were followed.
Having a clear history of changes made to the white paper content strengthens the issuer’s ability to respond to any later challenge from investors, partners or regulators.
For assistance: crypto-asset lawyer.
