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Companies and projects have increasingly relied on the sale of digital assets, or tokens, as a means of fundraising. These tokens generally do not grant the holders an ownership interest in the issuing company or project, but may provide governance rights, access rights or other utility. This has been conducted through public sales known as initial coin offerings (ICOs), proliferation through token generation events (TGEs) or private sales, among other mechanisms. While showing characteristics of traditional methods of fundraising, there are a range of unanswered questions related to the legal classifications of such products. As ICOs and TGEs will usually be distributed online and internationally, there is usually no single legal framework applying to such transaction, and the legal framework of each market in which the tokens may be offered or sold needs to be considered.
Introduction
Attitude of the country towards ICOs/token sales
ICOs and tokens remain widely unknown. To the best of our knowledge no official data on frequency of use of ICOs and tokens is available.
Legal affairs
Presence of any explicit regulation on ICOs and the issuance of token/coins
Croatian legislation does not regulate crypto assets explicitly. However, taxation and other financial regulations may nevertheless apply.
As already mentioned under Section f.ii and iii, the proposed MiCA Regulation will regulate crypto assets in general, including ICOs and tokens, once MiCA Regulation becomes applicable in Croatia. In addition, legal persons and craftsman which are involved in transactions with virtual assets listed in the AML Act are subject to the AML regulation and need to implement relevant measures prescribed thereunder, as mentioned under Section f.ii above.
Presence of any explicit restrictions on ICOs or the issuance, distribution and/or transfer of token/coins
Considering that coins and tokens are not considered either as securities or currency, it seems that no restrictions currently apply thereto. However, restrictions arising from AML obligations may apply.
Obligations and requirements to issue token/coins
N/A
Classification of token/coins in the jurisdiction
N/A
Presence of a duty to publish a prospectus bevor offering token/coins to investors
N/A
Presence of AML/KYC requirements that are needed to be fulfilled regarding (i) the initial issuance of token/coins and (ii) any following transfer of token/coins to third parties
Yes, taking into account that legal persons and entities which are dealing with virtual assets are subject to the obligations arising from the AML Act.
Additional comments regarding (i) the legal situation for ICOs/token/coins and (ii) any following transfer of token/coins to third parties
In addition to the above, it should be noted that Regulation (EU) 2022/858 of the European Parliament and of the Council of 30 May 2022 on a pilot regime for market infrastructures based on distributed ledger technology, and amending Regulations (EU) No 600/2014 and (EU) No 909/2014 and Directive 2014/65/EU (“DLT Regulation”) has been in force as of 23 March 2023 and has been transposed in the CMA.
Economic conditions