❔Legal FAQ
Is TAND3M a regulated platform?
TAND3M operates as a decentralized platform built on the TON blockchain. As such, it does not currently fall under specific financial regulations in most jurisdictions. However, startups, Brokers, and Project Backers are responsible for ensuring they comply with the relevant laws in their jurisdictions when participating in token or NFT sales.
Do startups need to comply with local regulations when conducting a token sale?
Yes. Startups using TAND3M are responsible for ensuring that their token sales comply with applicable laws and regulations in the countries they operate in and the regions where their backers are located. This includes complying with securities laws, anti-money laundering (AML) regulations, and any applicable Know Your Customer (KYC) requirements.
What legal risks should startups consider when launching a token sale?
Startups must consider several legal risks, including:
Securities Law: Depending on the jurisdiction, tokens may be classified as securities, requiring compliance with securities regulations.
Taxation: Startups must consider tax obligations on funds raised from token sales, which vary by region.
Intellectual Property (IP): Ensure that the project does not infringe on any existing intellectual property rights, such as trademarks or patents.
Liability: Startups should have clear legal agreements to protect themselves from liability claims, particularly if their project does not succeed as planned.
Does TAND3M provide legal advice to startups or users?
No, TAND3M does not provide legal advice. Startups, Brokers, and Project Backers should seek independent legal counsel to ensure they comply with local regulations and fully understand the legal implications of their involvement with TAND3M. TAND3M simply provides the platform for conducting token and NFT sales.
Are token sales on TAND3M subject to KYC/AML requirements?
Token sales conducted on TAND3M may require KYC (Know Your Customer) and AML (Anti-Money Laundering) compliance, particularly for backers from jurisdictions with strict financial regulations. If required, startups must implement KYC/AML procedures during the token sale process. This typically involves verifying the identity of backers and screening for financial crimes.
How is user data handled for KYC/AML purposes?
For token sales that require KYC/AML compliance, user data is collected and processed by third-party KYC providers contracted by the startup or TAND3M. These providers are responsible for ensuring that all user data is handled securely and in compliance with relevant data protection laws, such as the GDPR (General Data Protection Regulation) in Europe.
Are tokens sold on TAND3M considered securities?
The classification of tokens varies by jurisdiction. In some countries, certain tokens may be considered securities, while others may be classified as utility tokens. Startups must determine how their tokens are classified in each jurisdiction where they intend to conduct their sale and ensure compliance with relevant securities regulations.
Can Project Backers participate in token sales from any country?
No. Certain countries may restrict or prohibit participation in token sales or cryptocurrency transactions due to local laws and regulations. Project Backers are responsible for ensuring that they are legally allowed to participate in token sales on TAND3M from their jurisdiction. Startups should also take measures to ensure they are not violating local regulations by accepting funds from restricted regions.
What happens if a token sale is found to violate local regulations?
If a token sale is found to violate local regulations, the startup may face legal consequences, including fines, penalties, or suspension of the sale. TAND3M is not responsible for any legal violations committed by startups. Startups should work closely with legal counsel to ensure full compliance with local laws before launching their token sale.
What legal protections do Project Backers have when participating in token sales?
Project Backers must be aware that participating in a token sale on TAND3M does not provide them with ownership or equity in the startup unless explicitly stated in the terms of the sale. Legal protections for backers vary by jurisdiction. It is important for backers to conduct thorough due diligence before participating and consult legal counsel if needed.
Are smart contracts legally binding?
Smart contracts are self-executing contracts with the terms of the agreement directly written into code. While smart contracts automate transactions, their legal enforceability depends on the jurisdiction. Some regions may recognize smart contracts as legally binding, while others may not. Startups and backers should ensure they understand the legal standing of smart contracts in their region.
What happens if there is a dispute between startups and Project Backers?
TAND3M provides the platform for token sales but does not mediate disputes between startups and Project Backers. Disputes may arise over project outcomes, token performance, or miscommunication. It is essential for startups to clearly outline their terms and conditions and for Project Backers to fully understand the risks before participating. In case of a dispute, both parties may need to pursue legal remedies independently.
Are tokens purchased during a sale refundable?
No. All token sales conducted on the TAND3M platform are final, and tokens purchased cannot be refunded. Project Backers should carefully review the terms of the sale before participating, as they will not be entitled to refunds after the transaction is completed.
What tax obligations do startups have?
Tax obligations for startups vary by jurisdiction. Startups may be subject to taxes on the funds raised during a token sale, depending on their country’s tax laws. It is crucial for startups to consult with tax professionals to understand their tax obligations and report income from token sales appropriately.
What tax obligations do Project Backers have?
Project Backers may have tax obligations related to the purchase and subsequent sale of tokens. Capital gains taxes may apply when tokens are sold or exchanged for a profit. Backers should consult tax professionals in their region to understand the tax implications of their transactions on TAND3M.
What legal documents do startups need to provide for their token sale?
Startups may be required to provide the following legal documents before launching a token sale:
Terms and Conditions: A detailed document outlining the rights and responsibilities of token purchasers.
Privacy Policy: Explaining how user data will be collected, used, and stored.
KYC/AML Compliance Policy: If applicable, startups should outline how they comply with KYC/AML regulations.
Token Sale Agreement: The contract governing the sale of tokens, including the use of funds, token distribution, and any vesting schedules.
Can startups conduct a token sale if they are already incorporated in another country?
Yes. Startups incorporated in one country can conduct a token sale on TAND3M. However, they must ensure compliance with both the regulations of their country of incorporation and the regions where they plan to sell tokens.
Can TAND3M be held liable for a failed token sale?
No. TAND3M provides the infrastructure for token and NFT sales but does not guarantee the success of any sale. Startups are responsible for the success of their token sales, and Project Backers participate at their own risk. TAND3M cannot be held liable for any financial losses or failures related to token sales conducted on its platform.
How can startups protect themselves from legal liability?
Startups can protect themselves from legal liability by:
Incorporating a legal entity: Ensuring that the startup is incorporated as a legal entity, such as a limited liability company (LLC), to shield founders from personal liability.
Consulting legal counsel: Working with experienced legal professionals to ensure compliance with local laws and drafting clear terms and conditions.
Conducting due diligence: Performing necessary KYC/AML checks and ensuring full compliance with regulatory obligations to avoid potential legal issues.
Does TAND3M have a dispute resolution mechanism?
TAND3M does not offer an internal dispute resolution mechanism for issues between users, startups, or Project Backers. Disputes should be resolved between the involved parties, potentially through legal avenues. TAND3M recommends that all parties seek independent legal advice before escalating any disputes.
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