Placement of tokens as a way of attracting financing: first experience

After the successful ICO by Belvest JLLC on November 1, 2019, it became possible to purchase the issued tokens of Belvest JLLC through the investment platform Finstore.by, operated by LLC “DFS”.

What does it mean and how does it work?

According to the legal definition, a digital sign (token) is a record in the register of transaction blocks (blockchain), another distributed information system that certifies that the owner of a digital sign (token) has rights to objects of civil rights and (or) is a cryptocurrency. It can be compared to a deposit, as there is an obligation to pay interest and to return the value of the tokens upon expiration. Digital signs can be purchased and alienated for Belarusian rubles, foreign currency, electronic money, exchange digital signs of one type for digital signs of another type, as well as perform other operations provided for by the Decree of the President of the Republic of Belarus of 21.12.2017 No. 8 “On the development of digital economy”.
Investors in “Belvest” tokens may be any natural person — a resident of Belarus. To do this, you need to go through the registration and verification procedures on the platform. The purchased tokens will be stored in a virtual wallet on Finstore.by and once every three months investors will receive income at a fixed annual rate, for the period of validity of the token. Upon expiration of the token – the project implementation period, declared by the Company to attract investments – the amount of investment is returned and the validity of the tokens ends. Moreover, the acquired tokens will be possible to sell back to Belvest within three years. Belvest tokens are nominated in Russian Rubles and Euros. According to the platform, the yield on operations with tokens is even higher than on operations with standard financial instruments.

Tokens in Euro                                            Tokens in Russian Rubles
1 token — 100 Euro                                    1 token — 5000 Russian Rubles
Annual rate — 5.15%                                  Annual rate — 9%
Term — 3 years (offer annually)                 Term — 3 years (offer annually)

However don’t forget about the following risks:

  • Digital signs (tokens) (hereinafter – tokens) are not legal payment instrument and are not required to be accepted as means of payment.
  • Tokens are not secured by the state.
  • The acquisition of tokens can lead to a complete loss of funds and other objects of civil rights (investments) transferred in exchange for tokens (including as a result of volatility in the value of tokens, technical failures (errors), and illegal actions including theft).
  • The technology of the register of transaction blocks (blockchain), other distributed information systems, and similar technologies are innovative and constantly upgraded, which implies the need for periodic updates (periodic improvement) of the information system of LLC “DFS” and there is a risk of technical failures (errors) in its operation.
  • Due to the fact that the attitude of different States (and their regulators) to transactions (operations) with tokens and approaches to their legal regulation in different jurisdictions differ, there is a risk that in some States the contracts between the Client and LLC “DFS” or some of their terms may be invalid and (or) unenforceable.
  • The lack of a sufficient level of knowledge (competence) to make transactions (operations) with cryptocurrencies can cause adverse consequences for the person making such transactions (operations).

 

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This article is for informational purposes only. We hope you find this newsletter useful. SCHNEIDER GROUP is ready to provide professional support in our countries. We contribute our experience and knowledge for the growth of your business. Should you have any questions or would like our assistance in Belarus, please contact our expert:

Contact us

Sergey Odintsov
Certified Legal & Tax Advisor, Head of Tax & Legal, Minsk
+375 / 17 / 290 25 57

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