ICO Charter

ECN strongly believes that a European ICO/ITO charter, to create best practices in this exciting new innovation enabling projects to federate resources in a regulator-free environment. This should be embedded within in the existing legal frameworks, so entrepreneurs wont be intimated or stifled in developing innovation in Europe. We believe that ICO/ITO show innovative capacities building on proven crowdfunding practices by employing new technologies.

We believe that established crowdfunding players as well as new ecosystem actors assisting projects and companies in the issuance of new tokens should take the lead in educating the ICO/ITO market. This Charter seeks to help establish and guide consensus in creating best practices for the launch of ICO/ITOs.

ECN has joined other organisations in supporting the development of such best practices and is a signatory of the ICO Charter, which we encourage as a basis for discussion.

1 Information provided by the ICO/ITO project

  • Detailed and exhaustive presentation of the ICO/ITO Project
  • Complete White Paper
  • Detailed information on the team, market, product and legal entity(ies) sponsoring the ICO/ITO project
  • Bylaws, articles of incorporation and shareholding structure
  • Provide information used to determine target Cryptocurrency raised
  • Roadmap for ICO/ITO Project
  • Bios and resumes of the key players/staff of the project doing an ICO/ITO
  • Independent check of key players/Staff good standing (‘Fit and Proper’)
  • Independent check on the advisors’ suitability and independence

2 Independent legal review of the ICO/ITO token and its issuer

3 White paper features

  • Underlying legal entity issuing tokens and its recent financials
  • Brief description of ICO/ITO project
  • Project ICO/ITO business Plan
  • Amount of cryptocurrency sought
  • Use of proceeds
  • Technical presentation of project
  • Token structure, mechanics, issuance (primary) and post ICO/ITO (secondary) features for the specific
  • project ICO/ITO
  • Risk disclosures
  • Warning and disclaimers
  • Legal rules and competent court in the EEA (European Economic Area)

4 ICO/ITO smart contract code and technology specs

  • Smart Contract (s) or Access to code or any technical data detailing the Token delivery process, and subsequent impacts

5 Know your customer, antimony laundering and anti terrorist process

  • Passport, ID Card or any form of State issued ID document for physical person
  • Articles of incorporation of a legal entity with authorized signatory officers
  • Tax-Residency of investor

6 Tokens and cryptocurrency raising process

  • Disclosure of different types of ‘Wallets’, real time traceability of collected cryptocurrency (and/or Fiat currencies) for the ICO/ITO
  • Disclosure of fees in tokens paid to advisors
  • Pre-sales Mechanics/Rules and disclosure of rules to offer discounts
  • Traceability of all crypto transactions
  • Disclosure of all fees used for and during the process of the Pre-ICO/ITO and actual ICO/ITO

7 Use of ICO/ITO proceeds

  • Process of cryptocurrency proceeds ‘restitution in case the ICO/ITO target amount is not reached
  • Creation of an ICO/ITO Escrow wallet for cryptocurrencies
  • Rules and conditions for release of proceeds to the ICO/ITO project

8 ICO/ITO safety and security

  • Ongoing presence of an IT supervisor during the ICO/ITO to monitor the ICO/ITO web site, hacking and the correct Bugs
  • ISO 27001 certification recommended

9 Acceptance of a third party audit to measure the risk of the project

10 Post ICO/ITO

  • Disclose ICO/ITO process and history with outcome and results
  • Disclose market places where newly issued ICO/ITO token is traded
  • Sequence and means by which regular updates on the project are provided to the community

11 Commitment on the laws of listed States

ICOs complying with this Charter shall not:

  • Be carried out by an issuer incorporated under the laws of a State listed as “non compliant” in the latest version of the «Overall Rating Following Peer Reviews against the standard of EOIR » list published by the Global Forum on Transparency and Exchange of Information for Tax Purposes of the OECD, accessible at the following address: http://www.oecd.org/tax/transparency/exchange-of-information-on-request/ratings/ (a « Non Compliant State »); or
  • Be governed by the laws of a Non Compliant State.
  • If an ICO is carried out by an issuer incorporated under the laws of a State listed as “provisionnaly partially cooperative” or “partially cooperative” in the above-mentioned OECD list (a “Partially Cooperative State”), or governed by the laws of a Partially Cooperative State, the issuer shall expressly undertake, in the white paper, to answer in full transparency and cooperation to the tax information request submitted by foreign tax administrative, judicial or regulatory authorities