The study, entitled “Study on Blockchains – Legal, governance and interoperability aspects”, was carried out by a consortium of experts on behalf of the European Commission’s Directorate-General for Communication Networks, Content and Technology (DG CONNECT). It aims in particular at providing evidence of legal blockages or resistance likely to hinder developments based on a blockchain protocol. The study highlights issues relating to the burden of compliance and legal liability which, in the world of distributed networks, must necessarily be reconsidered.
The study also points out the legal barriers to the development of projects based on a blockchain protocol that exist within sectoral regulations, such as GDPR or the 5th anti-money laundering directive.
Lastly, the report devotes entire sections to the new legal issues raised by smart contracts (with regard, for instance, to contract law and consumer law) and utility tokens (with regard, in particular, to financial regulation). As part of the presentation of the regulatory considerations relating to utility tokens, the French example in the form of the law of 22 May 2019 (the “PACTE law“, France’s corporate reform law for business growth and transformation), which establishes an innovative and optional regime for public offers of tokens, is explained at length.
Based on this analysis of regulatory hurdles, the study sets forth several strategic options that could be applied by the European Commission: (i) a “wait-and-see” approach; (ii) the enactment of guidelines by national regulators to provide legal clarity on the scope of applicability of existing rules; (iii) the adoption of a new European regime to tackle the fragmentation of the single market. In terms of regulatory arrangements, the report mentions optional regimes (as provided for in the French framework) and experimental arrangements (sandboxes).
The Gide 255 team was contacted as part of this study in consideration of its expertise on regulatory issues pertaining to crypto-assets, which it handles every day on behalf of its clients.
- Spark Legal Network, Michèle Finck, Tech4i2, Datarella.
- EU Regulation 2016/679 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data (“GDPR“).
- EU Directive 2018/843 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (5th Anti-Money Laundering Directive).