In this post, we will analyse the content and form of the crypto-asset white paper (hereinafter the “White Paper”).
The White Paper is a document used to provide information about the crypto-assets offered to the public or for which admission to trading is sought. It must contain detailed information about the issuer, the project, the offer to the public, the rights and obligations attached to the crypto-assets, the underlying technology and standards applied and the risks associated with the project. It must also contain a statement that the issuer is solely responsible for the content of the White Paper and a warning that crypto-assets may lose value, may not be transferable or liquid and that utility tokens may not be exchangeable against the good or service promised if the project fails or is discontinued.
The White Paper will not be subject to a pre-approval process by the national competent authorities. It will be notified to the national competent authorities with an assessment whether the crypto-asset at stake constitutes a financial instrument under the Markets in Financial Instruments Directive (Directive 2014/65/EU), in particular. After the notification of the White Paper, competent authorities will have the power to suspend or prohibit the offering, require the inclusion of additional information in the White Paper or make public the fact that the issuer is not complying with the Regulation.
In accordance with article 5 in Title II of MiCA the White Paper shall contain the following information:
The White Paper shall contain the following statement: “The issuer of the crypto-assets is solely responsible for the content of this crypto-asset White Paper. This crypto-asset White Paper has not been reviewed or approved by any competent authority in any Member State of EU.”
The White Paper shall contain a clear and unambiguous statement that the crypto-assets:
It shall contain also that where the offer public concerns utility tokens, that such utility tokens may not be exchangeable against the good or service promised in the White Paper, especially in case of failure or discontinuation of the project.
The management body of the issuer of crypto-assets shall confirm with the statement that the White Paper complies with the requirements of Title II and that, to the best knowledge of the management body, the information presented in White Paper is correct and that there is no significant omission.
The White Paper shall contain summary which shall in brief and non-technical language provide key information about the offer of crypto-assets to the public or about the intended admission of crypto-assets to trading on a trading platform, and in particular, about the essential elements of the crypto-assets concerned. The aim of this summary is to help potential purchasers of crypto-assets to make an informed decision. The summary shall contain a warning that:
Form of White Paper:
European Securities and Markets Authority (ESMA), after consultation of European Banking Authority (EBA) shall develop draft implementing technical standards to establish standard forms, formats and templates.
In conclusion, the White Paper is important document because it helps potential investors and stakeholders to understand the features and potential of crypto-assets.