PORTUGAL Law and Practice Contributed by: João G Gil Figueira, Rodrigue Devillet Lima and Catarina Andrade Miranda, GFDL Advogados
to operate a multilateral trading or securities set - tlement system based on DLT. 10.3 Classification of Blockchain Assets Currently, no overarching legal framework or singular legal definition for blockchain assets is applicable within Portugal. Irrespective of the terminology employed, the classification of blockchain assets as regulated financial instruments is contingent upon the spe - cific characteristics of each asset. This determi - nation must be made on a case-by-case basis, considering whether the asset falls within the purview of existing financial services regulation. In accordance with the current legal framework, specific blockchain assets meet the criteria to be classified as financial instruments under MiFID II (and its incorporation into Portuguese law) or under the Portuguese Securities Code. In essence, any blockchain asset exhibiting the attributes of a financial instrument is likely to meet the criteria for regulation within this frame - work. The Portuguese law does not provide a concrete definition of the types of tokens that can be considered securities. It is necessary to analyse the characteristics of each token to determine whether it qualifies as a security under the Por - tuguese Securities Code. Generally, most NFTs fall outside the concept of securities due to their non-fungible nature. How - ever, this conceptualisation may be challenged in situations where NFTs are fractionalised and divided into smaller tradable units, a process similar to how traditional assets can be securi - tised and divided into shares.
The MiCA Regulation, now fully in force, broad - ens its scope to include new categories of crypto-assets that were previously unregulated under EU law. These include asset-referenced tokens and e-money tokens, as well as other tokens that do not fall under these classifications or existing EU financial services regulations. The new rules, particularly those relating to transparency and authorisation requirements, will vary depending on the specific charac - teristics of e-money tokens, asset-referenced tokens, and utility tokens. 10.4 Regulation of “Issuers” of Blockchain Assets The CMVM’s first regulatory approach consist - ed of communicating with entities involved in launching initial coin offerings (ICOs) regarding the legal qualification of issued crypto-assets. It stipulated that such an asset must meet the fol - lowing requirements to be considered a security: • it represents one or more legal situations of a private and patrimonial nature; • considering the represented legal situation, it is comparable to a typical security; and • in the information provided by the issuer, there are elements from which the issuer’s commitment to conduct can be inferred, resulting in an expectation of return for the investor, whether it be: (a) the right to income (if the token, for example, grants the right to profits or interest); or (b) the performance of acts by the issuer or related entity suitable for increasing the token’s value. Therefore, if a token is classified as a security, its ICO will be subject to the rules and obliga -
697 CHAMBERS.COM
Powered by FlippingBook