In an article for Právní rozhledy, Professor Jan Dědič, along with Jan Šovar and Ondřej Mikula from FINREG PARTNERS, examined the classification of ICO tokens under Czech private law. Their expert analysis demonstrates why these tokens cannot be regarded as securities.
When analysing the nature of tokens, the authors considered the specific characteristics of securities in the Czech Republic, particularly in the context of the Civil Code’s provisions. They concluded unequivocally that, under current Czech law, tokens cannot be issued as securities, even as book-entry securities.
The authors also explored the potential conditions under which tokens could be classified as securities. They noted that granting electronic form to certain documents, such as sea or bills of lading, has already been contemplated. “It is for the executive branch to determine whether to propose a change to the traditional understanding of a security by formally recognising it as an ‘electronic’, intangible asset,” they observed. Nevertheless, they emphasised that the current legal impossibility of categorising tokens as securities under domestic law does not hinder their practical application in the Czech market.
The article was published in Právní rozhledy 15-16/2018.
