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Crypto Launchpad: Which Jurisdiction?

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crypto7figs

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Mar 25, 2022
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#1
I'm since last year searching a jurisdiction for a Crypto Launchpad.

First thought Cayman or BVI would be the best fit as it is crypto.
However, the new VASP is hardcore. They want us to KYC the users, which will be impossible.

DEXes and DEFI you only connect your wallet and do your thing, and no KYC is required.

Any recommendation on which jurisdiction and reputable law firms with expertise in crypto and smart contracts?
 
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#2
  1. Price and do all business in Euro's
  2. Use no US infrastructure (servers, email providers, banks, $)
  3. Have strong restrictions blocking Americans and America
  4. Do no business directly or indirectly with the US or anything related to the US, this includes investment firms in BVI/Caymans that have American investors/owners or US companies backing them.

From there it's working out your market etc.

Fail at any of the above and you will likely spend millions in litigation
 
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#3
Hmm, thank you for answering.

So basically I need to avoid the US at all costs to don't have KYC? Or are there other reasons?

Not accepting US users aka investor is doable, not investing in projects that have US owners is harder.
Plus avoiding every company provider of every platform service provider we use in the company is also difficult.
 
#4
crypto7figs said:
So basically I need to avoid the US at all costs to don't have KYC? Or are there other reasons?
Click to expand...
That would be the best to do. You see, the banks also refuse US citizens if they live in the US. Too much trouble.
 
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#5
crypto7figs said:
I'm since last year searching a jurisdiction for a Crypto Launchpad.

I'm from a South American country, living in DR.
Explaining a bit of the business it is a smart contract that people connect the wallet, send their stable, and receive the tokens when the project launches.

Regarding the agreement, normally Launchpad will sign the Simple Agreement of Future Tokens/Equity on behalf of the participants.
Otherwise, no idea how it can be done. New projects need an agreement signed, and KYC from the investor. It's not clear if Launchpad may sign if the funds are not from the company.

First thought Cayman or BVI would be the best fit as it is crypto.
However, the new VASP is hardcore. They want us to KYC the users, which will be impossible.

DEXes and DEFI you only connect your wallet and do your thing, and no KYC is required.
I don't understand why it would be different here.

Any recommendation on which jurisdiction and reputable law firms with expertise in crypto and smart contracts?
Click to expand...
The best option for you is SVG.
 
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#6
Spoke to a lawyer in the Cayman, and he mentioned that for countries like Cayman, BVI, and other VASPs a meticulous KYC process is necessary.

When I asked about involving US investors, firms, or shareholders, the lawyer advised me to avoid too.
If it's a non-investment-related service provider like a designer or marketer, there shouldn't be any issues.

I plan to explore SVG recommendations and other unregulated jurisdictions if anyone knows any other

I appreciate the help, folks
 
#10
Giorgi Kurtsikidze said:
SVG is the only jurisdiction 100% free from any Crypto regulations, SVG legal system does not introduce Crypto, so it is not established at the legislative level. Accordingly, SVG is the best since it is traditional offshore with 0% tax and with no Crypto regulations.
Click to expand...
What about this?


Virtual Asset Act 2022 – Financial Services Authority

svgfsa.com svgfsa.com
 
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#11
It is just a requirement to be registered, just underlining your business activity.

Here is exact provision that identifies each individual as obliged to register.
 

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#12
I was just curious how a jurisdiction that's "100% free from any Crypto regulations" and which "does not introduce Crypto" can also have a Virtual Assets Law.

In any case, "(b) exchange between one or more forms of virtual assets;" seems like it would cover the proposed activities of @crypto7figs. Customers send stablecoins and get tokens back: i.e., exchange between two forms of virtual assets.

This means in SVG, this business would have to register, which in turn requires an AML framework. If we take that to be a reference to SVG's AML laws, it becomes clear that a KYC program of some sort if required to run the intended business.
 
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#13
Sols said:
I was just curious how a jurisdiction that's "100% free from any Crypto regulations" and which "does not introduce Crypto" can also have a Virtual Assets Law.

In any case, "(b) exchange between one or more forms of virtual assets;" seems like it would cover the proposed activities of @crypto7figs. Customers send stablecoins and get tokens back: i.e., exchange between two forms of virtual assets.

This means in SVG, this business would have to register, which in turn requires an AML framework. If we take that to be a reference to SVG's AML laws, it becomes clear that a KYC program of some sort if required to run the intended business.
Click to expand...
Can you share AML Law and also explain how it is linked to VASP Regulation?
 
#14
“So the Financial Action Task Force (FATF) on money laundering, which we’re all familiar with, in St Vincent and the Grenadines and across the Caribbean because they’re constantly imposing new regulatory requirements on us, they have expressed their concerns with the unregulated use of virtual assets.”

He said that at the beginning of the year, the United States government issued specific guidance on the use of virtual assets.

“And the FATF has issued a recommendation since October of 2018, in terms of virtual assets and virtual asset service providers, and has stated that virtual assets have become subject to anti-money laundering and counter-terrorist financing schemes of countries.”

trinidadexpress.com

St Vincent gets green light for virtual asset legislation

St Vincent and the Grenadines has become the fourth member of the Eastern Caribbean Currency Union (ECCU) to approve virtual assets legislation drafted by St Kitts-based Eastern Caribbean Central Bank
trinidadexpress.com trinidadexpress.com

By searching unregulated exchanges here: The Best Global Crypto Exchanges

I noticed that many of the unregulated exchanges such as Kucoin, OKX, XT, BitMEX are registered under Seychelles.

Edit: but found some news that Seychelles VASP regulation too.

What about Nevis or Marshall? I caught that @Sols is not a fan of Marshall.
One detail is that banking is good but not a deal breaker.

I would love to be as much compliant with the laws, but the KYC here is the deal breaker.
Maybe simple KYC may be doable, but the source of funds as Cayman requests is insane.
 
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#15
Giorgi Kurtsikidze said:
Can you share AML Law and also explain how it is linked to VASP Regulation?
Click to expand...

Laws & Regulations

St. Vincent and the Grenadines Financial Intelligence Unit - Taking the profit out of crime. The FIU was established in May 2002, pursuant to the provisions of the FIU Act 2001. It is the national/centralized agency for the collection, analysis and dissemination of suspicious transaction reports.
www.svgfiu.com www.svgfiu.com

Virtual Assets Act:
A registrant shall appoint annually an auditor who shall be a chartered accountant, a certified public accountant, a member of the Institute of Chartered Accountants of the Eastern Caribbean or some other professionally qualified accountant satisfactory to the Authority to perform an audit and the duties of the auditor shall:
<snip>
(v) to provide an opinion on whether suitable measures to counter money laundering and to combat the financing of terrorism have been adopted by the registrant and are being implemented in accordance with the applicable laws.
Click to expand...

And:
(2) Without limiting the generality of subsection (1 ), the guidelines may provide for-

(a) policies, practices and procedures for evaluating financial soundness of registrants;
(b) corporate governance;
(c) disclosure; and
(d) compliance with AML/CFT legislation.
Click to expand...

This setup is similar to other crypto/VASP regulations, where that regulation by itself doesn't contain much in terms of specific KYC provisions. Instead, it makes reference to compliance with AML laws directly or through notices by the competent authority.

It seems like things are still in motion, but I don't see this regulation turning out any other way than what FATF has decreed, which means KYC. They have already enacted the law. Now they have to make it on par with international standards.
 
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#16
Sols said:

Laws & Regulations

St. Vincent and the Grenadines Financial Intelligence Unit - Taking the profit out of crime. The FIU was established in May 2002, pursuant to the provisions of the FIU Act 2001. It is the national/centralized agency for the collection, analysis and dissemination of suspicious transaction reports.
www.svgfiu.com www.svgfiu.com

Virtual Assets Act:


And:


This setup is similar to other crypto/VASP regulations, where that regulation by itself doesn't contain much in terms of specific KYC provisions. Instead, it makes reference to compliance with AML laws directly or through notices by the competent authority.

It seems like things are still in motion, but I don't see this regulation turning out any other way than what FATF has decreed, which means KYC. They have already enacted the law. Now they have to make it on par with international standards.
Click to expand...
Do you have a suggestion to find offshore jurisdiction without Crypto regulation?
 
#17
No, I find it much easier to just deal with regulation. The non-KYC crypto businesses I've seen have either operated in jurisdictions with unclear laws (IIRC, US, Marshall Islands) or simply don't disclose any company details, and behind the scenes they operate a network of more or less related entities that serve different purposes.

The ones with unclear laws will eventually catch up. No one is intentionally going against FATF. It's a bit like CRS. Just a matter of time until everyone is caught up.
 
#19
Any jurisdiction with simple KYC that does not require obligating the source of funds from the users?

How do DEX and many launchpads work out there though?
Uniswap, Sushiswap, Pinksale, none requires KYC

Do you know if it's possible to mitigate with a third-party solution that checks the wallets, for example:
www.scorechain.com

Home - Scorechain | Blockchain & Digital Assets Compliance

Choose a global leader in Blockchain compliance, offering automated AML/CFT solutions that integrate seamlessly into your workflows. Ensure data privacy and comply with regulatory requirements and preemptively detect risks with our advanced analytics.
www.scorechain.com www.scorechain.com

And a side note, which countries other than the US should be excluded?
Puerto Rico, North Korea, China?, Russian?, etc
 
Last edited:
#20
crypto7figs said:
I'm since last year searching a jurisdiction for a Crypto Launchpad.

I'm from a South American country, living in DR.
Explaining a bit of the business it is a smart contract that people connect the wallet, send their stable, and receive the tokens when the project launches.

Regarding the agreement, normally Launchpad will sign the Simple Agreement of Future Tokens/Equity on behalf of the participants.
Otherwise, no idea how it can be done. New projects need an agreement signed, and KYC from the investor. It's not clear if Launchpad may sign if the funds are not from the company.

First thought Cayman or BVI would be the best fit as it is crypto.
However, the new VASP is hardcore. They want us to KYC the users, which will be impossible.

DEXes and DEFI you only connect your wallet and do your thing, and no KYC is required.
I don't understand why it would be different here.

Any recommendation on which jurisdiction and reputable law firms with expertise in crypto and smart contracts?
Click to expand...
At the end of the discussion again, my advice is correct, SVG has no any Crypto-related law in force.
 
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