Crypto fundraising platform Legion announced Monday that it has partnered with startup Bluprynt to add compliance solutions to help EU developers comply MiCA Rules during the sale of tokens, without involving a multitude of lawyers.
Bluprynt Founder and CEO Chris Brummer said Decrypt in an interview, the partnership focuses on reducing compliance costs. Whether it’s writing white papers in a proper format or coloring them with on-chain data, he described Bluprynt as an end-to-end solution.
“My goal has been to enable entrepreneurs to focus on their vision and make the best use of their capital,” Brummer said. “Bluprynt essentially develops software to translate regulatory requirements into a very user-friendly process.”
Although white papers have a long history in settings such as academia, they have become a staple for developers explaining how their projects work in the crypto space. At the same time, Brummer, a law professor at Georgetown University, said white papers can serve as a way to build investor interest, with different degrees of precision or attention to detail.
Under the EU’s Markets in Crypto-Asset (MiCA) rules, white papers became a requirement for projects selling tokens or raising capital from June, with a robust set of requirements for disclosure and minimum standards. For small projects, Brummer said the costs associated with producing a compliant white paper can become prohibitive, easily reaching €50,000 (about $54,000).
Bluprynt aims to streamline the process of extracting and formatting on-chain data, creating white papers that can be reviewed more quickly by lawyers. Brummer estimated that the cost of MiCA compliance was reduced by 70% using Bluprynt in practice.
Founded in 2021, Legion aims to provide retail investors with greater access to on-chain fundraising efforts. In fact, this puts a regulatory-compliant spin on initial coin offerings (ICOs), first popularized by Ethereum in 2016, alongside billions thrown away on other projects.
Last week, the Legion revealed an investor rating system, allowing founders to evaluate potential investors’ contributions to other projects. Alongside the partnership with Bluprynt, Legion founder Matt O’Connor said the fundraising platform further democratizes on-chain fundraising.
“Today’s market is full of capital-rich, community-poor projects,” he said in a statement. “With MiCA-compliant white papers and a licensed platform for retail investors, teams can now include value-add users at the earliest stages of fundraising. »
In the United States, ICOs are largely unregulated, while the Securities and Exchange Commission (SEC) has called on token issuers to come and register. Bearing the risk of litigation, Brummer described the token issuance process in the United States as a high-stakes scenario.
“It’s not easy,” he said. “The current requirements do not always correspond to the instrument, which does not benefit regulators or investors.”
Although the U.S. registration process may question projects about their corporate governance, it does not cover decentralized governance via DAOs. Additionally, audited financial statements could be an area of focus, while fundamental aspects of crypto such as tokenomics are not.
Depending on whether digital asset regulations will be adopted after the US presidential election, as some lawmakers promisedregulatory requirements may soon evolve. Meanwhile, Brummer described the standardized white papers as a nod to crypto’s roots in the EU.
“There are many different ways in which information provided by projects will be subject to some sort of regulatory oversight,” Brummer said. “We started with the white paper because it was a kind of proof of concept: the Europeans have been very forward-looking.”
Edited by Andrew Hayward
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