FAQs

SAFT OR NO SAFT

A Simple Agreement for Future Tokens is framed as an investment agreement and in a number of jurisdictions may require licensing or registration of the investment to be compliant.

WHY DO I NEED A LICENCE TO RAISE MONEY FOR MY OWN BUSINESS

It is true that raising funds by selling shares in your own company does not necessitate licensing in a number of jurisdictions however that typically only applies to shares in a company or a debenture. This is not the case with other investment instruments.

WHY REGISTER A COMPANY AND APPLY FOR A LICENCE TO DO AN ICO?

There is a lot of legal uncertainty with ICOs and it is important to give transparency to your backers and certainty for your business. At Diacle we always assist businesses to conduct ICOs in regulated jurisdictions. The Isle of Man requires issuers or tokens to be registered under the Designated Business Act.

WHAT IS THE REGISTRATION PROCESS IN ISLE OF MAN

We would first obtain a legal opinion for you from local counsel about your token to ensure that it was not defined as an investment. Based on that opinion we would apply for the licence. The licence would entail a fit and proper test, evaluation of the token and requirement to comply with due diligence processes in relation to the sale of the token.

WHAT DOES DIACLE SEEK TO ACHIEVE?

A: In order to be successful in our work, we work to clearly understand your objectives. This allows us based on your objectives and outcomes to provide various options therefore giving a less restrictive approach.

The main things we wish to achieve are the following:

1.    Regulation of cryptobusinesses

2.    Regulation of ICOs

3.    Tax treatment

4.    Regtech & Blockchain

5.    Pro-active Regulation

HOW CAN DIACLE ASSIST IN ENSURING THAT A TOKEN NOT COVERED BY REGULATORY BODIES IS SUCCESSFUL?

A: Diacle can support you and give you a retainer in which questions can be asked about an upcoming product and business ideas and provide feedback on this. By doing so, the structure and legal mechanics can be coordinated for you, such as the best model for the relationships between different platforms.

HOW CAN DIACLE ASSIST WITH DRAFTING TERMS AND CONDITIONS?

A: We provide our Jump Start Documents service which is a highly cost effective solution to get all the contracts you need.

HOW CAN DIACLE HELP YOU SET UP A COMPANY?

A: Firstly, Diacle will identify the product and the solutions needed. By looking at the suggested solution, Diacle will then consider incorporation, the directors needed, operational support required in the early stages of set up and any other resources which may be needed on the ground such as an operations manager. All of the following needed for business set up will be covered by Diacle.

HOW DO GOVERNMENTS REGULATE TOKEN SALES?

A: Every country is different, some may regulate the marketing of token sales under securities law, some may say they have jurisdiction just by transacting with them. For example, if you transact with a US person, then that engages US jurisdiction. It is important to remember it is not the same everywhere. This creates advantages in that the lack of clarity can be used to open other markets, but this also creates risk as well.

REGARDING THE ISLE OF MAN, WHAT IS NECESSARY FOR SETTING UP THERE?

A: The local structure of the Isle of Man involves no express requirements for a local representative in the initial stages. However, once set up is established a local representative is expected. A local money laundering reporter officer MLRO will be required to act locally as a professional consultant.

WHAT EXAMPLES ARE THERE OF EXCHANGES ESTABLISHED IN THE IOM?

A: Coin Corner is a European based Exchange in the Isle of Man, which achieves operational goals as the experience with regulator becomes pragmatic. The structure and guidelines which must be followed are set out and there is an objective as to how to conduct the business.

DOES DIACLE WORK WITH OTHER EU JURISDICTIONS?

A: Many EU states do not currently regulate in the same way as the Isle of Man, however, within six months time all of the EU is expected to be regulated in a short space of time. However, if you as an individual prefers one jurisdiction over another then Diacle is happy to help and assist in any queries.

GAMING LICENCES

WHAT IS NEEDED TO OBTAIN AN ONLINE GAMING LICENCE?

A: In the instance of IoM, the business must be set up, although the business plan is the most important document, as this encompasses all of the internal controls within your business and financial forecasts. Overall, the business plan, financials and internal controls are the fundamental requirements. Additionally, software must be demonstrated and tested independently. In the case of a random number generation system, then this must be certified.

WHAT IS REQUIRED FOR A GAMING BUSINESS PLAN?

A: In order to have a successful gaming business plan, there must be AML policies, gaming control policies and safeguarding policies. Furthermore, the format will be key in helping you to establish a successful gaming business plan.

WHY PICK DIACLE WHEN TRYING TO OBTAIN A GAMING LICENCE?

A: Adam Vaziri, CEO of Diacle, is the only lawyer in the world who has obtained a blockchain gaming license and therefore nobody else has this experience. Diacle is keen to provide whatever support is needed to get you to the point where you can apply for the license by analysing how such could work within the IoM context and internationally as well. Diacle has also been proud to educate the gambling commission on blockchain gaming licenses which heightens confidence in safeguarding the players funds.