BCP Framework for Assessment of Crypto Tokens - MME

regulation
cryptoassets

#1

Switzerland-based MME’s next version of their “Blockchain Crypto Property” framework (their umbrella term for crypto assets), amended from the initial Sept 2017 edition.

It has a review of how this applies to the Swiss home jurisdiction where they are based, but the intent is that it can be applied anywhere.

I’m including the definition of the three categories they define below:

BCP CLASS 1: NATIVE UTILITY TOKENS

BCP Class 1 Tokens can be transferred on a decentralized ledger from user 1 to user 2, but do not grant any rights towards a counterparty. The owner of a Native Utility Token does not have any relative or absolute right, except for the right relating to the Token itself. The fact that a Token might be used on a specifc blockchain system, for example as “gas”, does not exclude it from being assigned to the BCP Class 1. The relevant criteria for this category is the lack of a relative right against a counterparty, such as the Token generator or a third party.

BCP CLASS 2: COUNTERPARTY TOKENS

The second category, BCP Class 2, refers to Tokens which include any form of a relative right against a third-party. The relative right might be a (legal) right to use the Token generator’s services, a right to receive a financial payment, a right to receive an asset or a bundle of shareholder’s right.

BCP CLASS 3: OWNERSHIP TOKENS

The third category, BCP Class 3, includes cases in which the Token provides technical, SCS based ownership rights in assets. The purpose of a BCP Class 3 token is to transfer rights of associated assets by transferring the Token. These assets can include IP rights (e.g. copyright) and may also include material objects in certain jurisdictions. In contrast to BCP Class 2, BCP Class 3 Token holders do not have a claim or relative rights against a counterparty. Rather, BCP Class 3 Tokens provide absolute rights (erga omnes) in the form of a right in rem of the associated assets.