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The emergence of digital assets and the innovation of blockchain technology have led to the rise of specialized fintech law firms that are pivotal in shaping the legal landscape around these modern financial instruments. Notably, the process of asset tokenization, which involves creating blockchain tokens that represent various types of assets, has become a key area of expertise for such firms.
These fintech law firms offer invaluable guidance and services to navigate the complex legal framework surrounding digital assets, ensuring compliance, and fostering innovation within the blockchain and crypto spaces. Their expertise in asset tokenization is not just shaping the financial industry but also enabling new forms of investment and asset management.
Fintech law firms’ role in tokenization transactions
Here are some of the roles that law firms play in such tokenization transactions:
- Law firms ensure that tokenization transactions comply with existing laws and regulations, including securities laws, anti-money laundering (AML) requirements, and Know Your Customer (KYC) protocols.
- They help clients understand the implications of tokenizing assets within different jurisdictions, as the legal landscape can vary significantly across borders.
Legal Framework Development:
- They create the legal frameworks necessary for token offerings, including drafting the terms and conditions that govern the issuance and trading of tokens.
- This also involves developing smart contracts that are used to execute and manage tokens on blockchain platforms.
- Attorneys conduct thorough due diligence to ensure the underlying assets are legally sound for tokenization.
- They also examine the legal ownership of the asset to be tokenized, ensuring that there are no encumbrances or disputes that could affect the transaction.
- Law firms assess the potential risks associated with tokenization transactions, including regulatory risks, market risks, and the risk of litigation.
- They advise clients on how to mitigate these risks, often through legal structuring and comprehensive contractual protections.
Intellectual Property Protection:
- When tokenizing intangible assets such as digital art or intellectual property, law firms help in securing the necessary copyrights and trademarks.
- They ensure that the tokenization process does not infringe on existing intellectual property rights.
- Attorneys provide guidance on the tax implications of tokenizing assets and conducting transactions with tokens.
- They help clients structure transactions in a tax-efficient manner and comply with tax reporting requirements.
- Law firms often facilitate the actual transaction process, ensuring that all legal formalities are completed and that the transfer of tokens complies with the law.
- They may also act as intermediaries between different parties involved in the transaction.
- In the event of a dispute, law firms represent clients in resolving conflicts that may arise from tokenization transactions.
- They provide litigation support and may also engage in arbitration or mediation as alternative dispute resolution mechanisms.
Education and Advocacy:
- They educate clients about the evolving landscape of digital assets and blockchain technology.
- Law firms may also advocate for regulatory changes to support the growth and development of the tokenization market.
- Attorneys may provide market analysis to clients, helping them understand the potential demand for tokenized assets and the liquidity of the token markets.
By offering these services, law firms ensure that tokenization transactions are legally compliant and structured in a way that aligns with the strategic business objectives of the parties involved.
List of fintech law firms active in digital assets (Tokenization)
|Name||Reference projects||Link||Active Markets|
|DLA Piper||Advised on the tokenization of a $100 million private equity fund by the asset manager KKR||https://news.mergerlinks.com/||Global|
|Herbert Smith Freehills||Advised Red Eléctrica Corporación on the world’s first syndicated loan using blockchain technology, which involved a €150 million loan engaged from BBVA, BNP Paribas and MUFG||https://www.herbertsmithfreehills.com/our-expertise/services/blockchain-and-digital-assets||Global|
|Linklaters||Advised Vonovia on the issue of the first fully digital registered bond||https://www.linklaters.com/en/about-us/news-and-deals/deals/2021/january/linklaters-advises-vonovia-on-the-issue-of-the-first-fully-digital-registered-bond||Global|
|Allen & Overy||Advised on EIB’s first digital bond issuance on a public blockchain||https://www.allenovery.com/en-gb/global/news-and-insights/news/allen-overy-advises-on-eibs-first-digital-bond-issuance-on-a-public-blockchain||Global|
|Annerton||AdviseD Volksbank Mittweida on TresorToken for precious metals||https://annerton.com/en/annerton-advises-volksbank-mittweida-tresortoken/||Europe|
|White & Case||Advised Société Générale-FORGE on launch of first institutional stablecoin deployed on public blockchain||https://www.whitecase.com/news/press-release/white-case-advises-societe-generale-forge-launch-first-institutional-stablecoin?s=Tokenization||Global|
|YPOG||Advised Hauck & Aufhäuser on the acquisition of Kapilendo Custodian||https://www.ypog.law/en/press/ypog-advises-hauck-aufh%C3%A4user-on-the-acquisition-of-kapilendo-custodian||Germany|
|Baker McKenzie||Advised on Pioneering Tokenization of Knight Dragon’s Central London Real Estate||https://www.bakermckenzie.com/en/newsroom/2022/06/tokenization-of-knight-dragon-real-estate||Global|
|Bryan Cave Leighton Paisner||Advised tZero on its enterprise-level blockchain solutions including token issuance, management and trading.||https://www.bclplaw.com/en-US/practices/sectors/crypto-and-digital-assets.html#experience||Global|
|Perkins Coie LLP||Counselled Microsoft in connection with the development and launch of its blockchain platform that manages supply chains for high value server commodities and other goods.||https://chambers.com/department/perkins-coie-llp-fintech-legal-blockchain-cryptocurrencies-fintech-49:2804:225:1:3644||US, Asia|
|Paul Hastings LLP||Advised on the launch of Circle Yield, a well-regulated crypto yield product offered as a treasury solution for enterprises and corporate treasury leaders||https://chambers.com/department/paul-hastings-llp-fintech-legal-blockchain-cryptocurrencies-fintech-49:2804:225:1:25003||Global|
|DLA Piper||Represented TikTok in launch of its first ever NFT collection||https://www.dlapiper.com/en-kr/news/2021/10/dla-piper-represents-tiktok-in-launch-of-its-first-ever-nft-collection||Global|
|Al Tamimi & Company||Advised on the Bamaar Coin the first Arab cryptocurrency launches at Sharjah Economic Ramadan Majlis||https://www.unlock-bc.com/86785/bamaar-coin-the-first-arab-cryptocurrency-launches-at-sharjah-economic-ramadan-majlis/||MENA|
|Clifford Chance||Advised JP Morgan and SBI Digital Assets Holdings on the first successful industry pilot in Singapore for cross-currency transactions on tokenised deposits.||https://www.legalbusinessonline.com/deals/cc-advises-singapore%E2%80%99s-first-tokenised-forex-transaction||Global|
|Linklaters, WongPartnership, Allen & Gledhill and Rajah & Tann||Advised DBS launch of Asia’s first automated digital bond issuance platform||https://www.dbs.com/newsroom/DBS_launches_Asias_first_automated_digital_bond_issuance_platform||Global|
|Osborn & Clark||Advised on Bitbon STO, Europe’s first security token offering that received approval from the German financial regulator BaFin in 2019||https://www.bitbondsto.com/||Global|
|GSK Stockmann||GSK Stockmann advised Siemens AG on the legal structuring and issuance of a crypto securities bond under the German Electronic Securities Act (eWpG) with a volume of EUR 60 million||https://www.legal500.com/developments/press-releases/gsk-stockmann-advises-siemens-on-crypto-securities-bond/||Europe|
Additional “fintech” law firms active in digital assets:
- Bird & Bird
- Freshfields Bruckhaus Deringer
- Sullivan & Cromwell LLP
- ArentFox Schiff
- Covington & Burling
- Davis Polk & Wardwell
- Goodwin Procter
- Hogan Lovells
- Jones Day
- Kirkland & Ellis advised
- Latham & Watkins
- Paul, Weiss, Rifkind, Wharton & Garrison LLP