The specific KYC requirements for token sales may vary depending on the jurisdiction but typically involve collecting and verifying personal information such as name, address, date of birth, and government-issued identification. This information is usually collected through a third-party KYC provider with compliance and data security expertise.
Some essential elements of KYC policy and KYC administration are mentioned below.
1. Your business should not sell any tokens to citizens and/ or residents of countries and territories where applicable law prohibits purchasing, trading, holding, or using tokens.
It is recommended to mention in the documents of your website/platform the list of “restricted territories” and to write that if a user from one of those locations uses VPN or hides his/her location by any means, your company is not liable and the user is fully liable for his/her actions.
Your technical team can restrict access to your token sales page to users from “restricted territories.”
2. The nature of your token (utility token, security token, or another type of digital asset) should be clearly described in your white paper and legal documents of your website/platform. Depending on the nature of the token, different countries have different requirements for token buyers.
Some jurisdictions require companies to conduct "accredited investor" checks, which verify that the investor meets certain income or net worth requirements to invest in securities. This is intended to ensure investors have the financial knowledge and resources to make informed investment decisions.
3. You should clearly describe, as detailed as possible various legal risks a token buyer undertakes.
Token buyers shall understand that the company cannot guarantee a specific price for its token. Moreover, the token will be listed after token sales, and the company will not be able to influence the token price. The token price will depend on the supply and demand. A token buyer should agree that the company is not liable even if the token price drops to zero.
The Sino Fintech team can draft a KYC Policy for token sales specifically for your project. Besides, our professionals can arrange KYC checks for your business.
Some essential elements of KYC policy and KYC administration are mentioned below.
1. Your business should not sell any tokens to citizens and/ or residents of countries and territories where applicable law prohibits purchasing, trading, holding, or using tokens.
It is recommended to mention in the documents of your website/platform the list of “restricted territories” and to write that if a user from one of those locations uses VPN or hides his/her location by any means, your company is not liable and the user is fully liable for his/her actions.
Your technical team can restrict access to your token sales page to users from “restricted territories.”
2. The nature of your token (utility token, security token, or another type of digital asset) should be clearly described in your white paper and legal documents of your website/platform. Depending on the nature of the token, different countries have different requirements for token buyers.
Some jurisdictions require companies to conduct "accredited investor" checks, which verify that the investor meets certain income or net worth requirements to invest in securities. This is intended to ensure investors have the financial knowledge and resources to make informed investment decisions.
3. You should clearly describe, as detailed as possible various legal risks a token buyer undertakes.
Token buyers shall understand that the company cannot guarantee a specific price for its token. Moreover, the token will be listed after token sales, and the company will not be able to influence the token price. The token price will depend on the supply and demand. A token buyer should agree that the company is not liable even if the token price drops to zero.
The Sino Fintech team can draft a KYC Policy for token sales specifically for your project. Besides, our professionals can arrange KYC checks for your business.