SWEDEN Law and Practice Contributed by: Niclas Rockborn, Rikard Sundstedt and Robin Entenza, Gernandt & Danielsson
that the parties are generally free to determine at what point during the transactions various rights and obli- gations associated with the ownership of the assets will be transferred from one party to the other, as well as their respective liabilities to one another during the course of completing the transaction (and thereafter). In that regard, Swedish law does not prescribe any particular rules specific to blockchain-based assets. However, the validity of ownership transfer from the perspective of rights in rem is more complex and, in the absence of precedents, remains unsettled. One fundamental aspect of rights in rem under Swedish law is how and when transfer of ownership to certain property confers protection to the transferee (pur- chaser) from claims by the creditors of the transferor (seller). Under Swedish law, a transfer of ownership must ordinarily be manifested through some observable action to confer rights in rem (ie, protection from the seller’s creditors). For physical movable property, this is achieved through the transfer of possession (the “principle of tradition”). For immovable property and dematerialised assets, where physical delivery is impractical, the legislature has instead enacted spe- cific legislation tying rights in rem to registration. For example, this applies to: • dematerialised stocks and bonds; • other types of financial instruments; and • emission allowances. However, for blockchain-based assets, there are no similar rules under Swedish law which ascribe valid- ity to rights in rem based on registration. It is there- fore uncertain whether and how rights in rem could be obtained for transfers of blockchain-based assets. This issue is addressed in the legislative proposal accompanying the DLT Regulation (SOU 2023:102). If enacted, the proposed changes would mean that the person registered as owner in the ledger of a DLT-based financial instrument is presumed to have ownership rights (unless proven otherwise), and that rights in rem are established through validation of the transfer via a consensus mechanism.
The proposal would also ensure that a validated trans- fer protects the transferee from subsequent claims by the transferor’s creditors in respect of any right that was not registered in the ledger before the validation of the transfer. This proposal will not only apply in respect of transfers in ownership stemming from the sale of assets but other transfers such as gifts, wills, inheritance or division of property as well. 1.2.2 Access to Banking MiCA imposes specific requirements and restrictions on the types of partners that crypto-asset service providers can use for general banking and payment services. Under MiCA, crypto-asset service providers are required to place clients’ funds (other than e-mon- ey tokens) with a credit institution or a central bank by the end of the business day following the day on which those funds were received. Furthermore, cryp- to-asset service providers are required to keep cli- ent funds in accounts separately identifiable from the provider’s own funds. These safeguarding and seg- regation requirements, which essentially mirror those applicable to Swedish payment institutions, constrain how crypto-asset service providers may arrange their banking partnerships. Furthermore, crypto-asset service providers who provide payment services relating to the services they offer may do so directly or through a third par- ty, provided that the crypto-asset service provider or the third party is authorised under Directive (EU) 2015/2366 (PSD2) – for example, as a payment insti- tution or e-money institution. Partnering with unregu- lated payment processors is not permitted. 1.2.3 ESG/Sustainable Finance Sustainability – ESG/Sustainable Finance Requirements In November 2021, the SFSA and the Swedish Envi- ronmental Protection Agency ( Naturvårdsverket ) pub- lished a joint opinion proposing that mining activities should be regulated because of the environmental impacts of the inherent high energy demand of the Proof of Work mining method. This was partly a reac- tion to a significant increase in energy consumption for cryptocurrency mining in Sweden, likely driven by
615 CHAMBERS.COM
Powered by FlippingBook