LIECHTENSTEIN Law and Practice Contributed by: Christian Inmann and Markus Stelzl, Inmann Stelzl & Partner Attorneys at Law Partnership
ments and does not apply to crypto-assets governed by MiCAR. Participants must be authorised and obtain specific approval from the FMA, which co-operates with the European Securities and Markets Authority (ESMA). Banking, Payment Services and Digital Lending Digital lending and payment-related business mod - els are regulated under Liechtenstein national law, depending on their structure. Lending may constitute regulated banking business under the Liechtenstein Banking Act. Payment services may require authorisation under the Payment Services Act. The regulatory classification depends on the economic substance of the activity rather than the use of distributed ledger technology. Crowdfunding Crowdfunding activities are regulated at EEA level under the European Crowdfunding Service Providers Regulation (ECSPR). Platforms operating from Liech - tenstein must be authorised as European Crowdfund - ing Service Providers and are supervised by the FMA. Depending on the structure of the offering, additional regimes, such as securities law or fund regulation, may apply. Decentralised Finance (DeFi) and Operator-Free Protocols Decentralised finance is not expressly regulated under Liechtenstein or EEA law. However, where DeFi arrangements involve activities that fall within regu - lated categories, MiCAR, MiFID II and/or AML/CFT legislation may apply, depending on the degree of decentralisation and effective control. Liechtenstein supervisory practice follows a sub - stance-over-form approach. Genuinely operator-free protocols may fall outside existing licensing regimes, while centralised access points such as custody pro - viders, brokers or fiat on/off-ramps are regularly sub - ject to financial market and AML regulation. 2.3 Compensation Models In Liechtenstein, industry participants may apply vari - ous compensation models, including direct customer
fees, commissions, spreads, bundled services, or remuneration linked to tokens or protocols, depend - ing on the type of service and regulatory framework. For investment services governed by MiFID II, all costs must be disclosed upfront in a transparent and fair manner, and any third-party incentives are only allowed if they improve the quality of the service and do not disadvantage clients. Payment service provid - ers are required to clearly communicate all fees before entering into a contract and to make pricing informa - tion easily accessible. For crypto-asset services under MiCAR, service providers must fully disclose fees and pricing structures, including those related to custody, trading and staking, in both pre-contractual disclo - sures and relevant documentation. 2.4 Variations Between the Regulation of Fintech and Legacy Players As a general principle under Liechtenstein and EEA financial market law, fintech companies are subject to the same regulatory framework as legacy finan - cial institutions where they carry out regulated activi - ties. Regulation is therefore activity-based rather than technology-based (substance over form). 2.5 Regulatory Sandbox Liechtenstein does not operate a formal regulatory sandbox of the kind seen in some other jurisdictions. The Liechtenstein FMA has not established a statutory sandbox regime or “licence-light” framework specifi - cally for fintechs under Liechtenstein law. Instead, the FMA uses an innovation-friendly and guidance-oriented approach. It has set up an internal “Regulatory Laboratory” or fintech competence team to support and advise innovative companies, includ - ing those developing fintech and blockchain business models, on licensing requirements, applicable regula - tion and compliance pathways. This body provides early clarification on whether and how regulatory requirements apply, helping firms navigate the licens - ing process and understand their obligations without offering a separate sandbox testing environment. Further, the EU DLT Pilot Regime is available in Liech - tenstein.
492 CHAMBERS.COM
Powered by FlippingBook