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Article Liechtenstein: Parliament Adopts Blockchain Act

(Oct. 30, 2019) On October 3, 2019, the Parliament of Liechtenstein unanimously adopted the Token and TT-Service Provider Act (TVTG) (“Blockchain Act”), a “comprehensive regulation of the token economy.” The Act has been substantially revised since the conclusion of the consultation process that ran from August to November 2018.

The Blockchain Act is subject to a popular vote if at least 1,000 Liechtenstein citizens or at least three municipalities submit a request to that effect within 30 days of the official announcement of the resolution of Parliament. (Constitution art. 66, para. 1.) The deadline for submitting a request is November 8, 2019. If no request is filed, the Blockchain Act will enter into force on January 1, 2020, after it has been signed by the reigning prince and published in the State Law Gazette. (Blockchain Act art. 51.)

Objectives of the Blockchain Act

The objectives of the Blockchain Act are to “ensure trust in digital legal communication, in particular in the financial and economic sector, and the protection of users of TT [trustworthy technologies] [s]ystems” and to “create an optimal, innovation-friendly, and technology-neutral framework for rendering services on TT [s]ystems.” For that purpose, it regulates, on the one hand, the civil law questions regarding tokens, the representation of rights via tokens, and the transfer of tokens, and, on the other hand, the supervision and the rights and obligations of TT service providers. (Blockchain Act art. 1.)

Scope of Application

The Blockchain Act applies to all trustworthy technologies (TT) service providers that generate or issue tokens in Liechtenstein or when the parties in a token transaction explicitly provide for its application. Likewise, the provisions on supervision, registration, and rights and obligations of TT service providers apply only to those providers that are headquartered or reside in Liechtenstein. (Art. 3, para. 2; art. 11, para. 2.)


Trustworthy technologies are defined as “technologies through which the integrity of tokens, the clear allocation of tokens to a TT identifier, and the transfer of tokens can be ensured.” Tokens are defined as “information on a TT system that can represent claims or rights of membership vis-à-vis a person, rights in rem, or other absolute or relative rights, and can be allocated to one or more TT identifiers.” A TT identifier is “an identifier that allows for the clear allocation of tokens.” TT systems are “transaction systems that allow for the secure transfer and storage of tokens and ensure the rendering of services via trustworthy technologies.” (Art. 2, para. 1(a)–(c); art. 3, para. 2.)

Duty to Register

All persons that are headquartered or reside in Liechtenstein and who provide TT services on a professional basis in Liechtenstein are required to register with the Financial Market Authority of Liechtenstein (FMA). They are entered into the publicly accessible TT service provider register. Token issuers that are headquartered or reside in Liechtenstein and that perform the token issuance in their own name or on a nonprofessional basis in the name of a third party must register and will be entered into the register if tokens worth 5 million Swiss francs (CHF) (about US$5.06 million) or more are issued over a period of 12 months. (Arts. 12, 23.)

In general, TT service providers will be registered only if they

  • have full capacity to act;
  • are trustworthy;
  • are professionally competent;
  • are headquartered or reside in Liechtenstein;
  • where applicable, have the required minimum capital;
  • have an appropriate organizational structure with defined areas of responsibility as well as a procedure to deal with conflicts of interests;
  • have written internal rules and control mechanisms that are appropriate to deal with the type, extent, complexity, and risks of the provided TT service and guarantee sufficient documentation of it;
  • where applicable, have specific internal control mechanisms in place;
  • have an authorization according to the Trustee Act if they want to work as a TT protector, meaning as persons who hold tokens as a trustee in their own name on behalf of third parties; and
  • have an authorization according to article  5, paragraph 1 of the Financial Market Authority Act if they intend to pursue an activity that requires such an additional authorization. (Arts. 13–17.)

Providers are trustworthy when they have not been convicted by a court of fraudulent bankruptcy or similar offenses or sanctioned for repeated and serious violations of the Act Against Unfair Competition, the Consumer Protection Act, or other acts listed in article 5, paragraph 1 of the Financial Market Authority Act, among other things. (Art. 14.)

Disclosure Duties

All TT service providers must publish publicly and always accessibly

  • information on the TT system used;
  • a declaration on how the TT system is suitable for the respective application; and
  • information on a possible change of a TT system, including an explanation. (Art. 29.)

Token issuers must publish basic information on the tokens before their issuance in an easily accessible manner and notify the FMA of the tokens’ issuance. Exceptions exist when all purchasers have waived the right to receive basic information, the offer is for less than 150 users, the sales price of the whole public offering is less than CHF5 million, or there is already a duty to publish qualified information according to other laws. (Arts. 30, 31, 33.)

Violations of the Act

TT service providers that fail to register or use a name that suggests that they are TT service providers are subject to a prison sentence of up to one year or a fine of up to 360 daily rates. For other types of violations, they are subject to fines of up to CHF100,000 (about US$101,154). Sanctions can be made public by the FMA. (Arts. 47, 49.)

Miscellaneous Provisions

The Blockchain Act also contains provisions on protections in injunction, estate, business foreclosure, and bankruptcy proceedings; on record keeping; and on the admissibility of outsourcing important operational functions. (Arts. 25–27.)

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