Token as value rights & Token offerings and decentralized trading venues E-Book

Josef Bergt

• Herausgeber: Books on Demand
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 553

Veröffentlichungsjahr: 2020

Beschreibung

This book was translated from German into English by means of artificial intelligence (machine translation). This academic paper deals with both civil (securities) law and regulatory (securities) law aspects. Thus, a summary of the property law is provided, which deals with the classification of tokens under Liechtenstein law. Furthermore, dematerialized securities, which have been known to the Liechtenstein legal system for almost 100 years, will be dis-cussed. The civil and corporate law focus is on Liechtenstein, while the Swiss corporate law and the general civil law of Austrian law are also taken into account. The supervisory part of the work is clearly in the focus of Union law, but also takes into account national specialties of Liechtenstein, Austria and Germany in addition to European legal acts. Thus, tokens and token-based business models are also examined in the light of European legal acts such as MiFIR, MiFID II, CRR, CRD IV, CSDR, EMIR, AIFMD, UCITSD, E-Money Directive II, PSD II, MAD/MAR, Prospectus Regulation, 5th AML Directive and other regulations, directives, as well as implementing regulations and delegated regulations. A special focus is placed on crypto exchanges and decentralized trading places (DEX). In addition, a focus will be placed on consumer law in terms of tokens and distance selling contracts, taking into account the Consumer Rights Directives. In this context, tokens as data or software and thus as digital content and consequently merchandise are also dealt with in more detail and the parallels to tokens as tokens with intrinsic value or virtual currencies in contrast to fiat money are shown. Furthermore, the author aims at explaining deposit business, e-money transactions and financial instruments as communicating vessels in contrast to virtual currencies. Although this is primarily a legal work, technical aspects of Distributed Ledger Technologies, such as the blockchain, smart contracts, agoric computing, self-sovereign identity, etc. - as far as this is necessary for the legal assessment - are also explained in more detail. The present discussion is to be understood as scientific work with practical relevance for advice in connection with blockchain based business models.

Leseprobe

“Imagination will often carry us to worlds that never were.

But without it we go nowhere.”1

1Carl Sagan (1934 - 1996), astronomer, cosmologist, astrophysicist, astrobiologist, television presenter, non-fiction writer, writer.

Preface / Acknowledgement

"No guilt is more pressing than that of saying thanks"2

My first thanks therefore go to my supervisors, fellow students, colleagues and staff, who have repeatedly guided me into new scientifically paths with enriching ideas and contributions in discussions over the past years.

I would also like to take this opportunity to thank my diligent and patient proofreaders and all persons who were not explicitly mentioned here.

My parents, brothers and sisters and my colleagues occupy an outstanding position in every respect. My special thanks go to them.

Gams / Vaduz / Ranggen, in November 2019 Joseph Bergt

PS: I look at the present work with some pride and hope on the one hand that I never get tired of the scientific debate and furthermore I call upon or rather invite everyone to empirically falsify or verify the theses represented in this paper; only in this way a validation in the sense of the scientific method can be achieved and I look forward to any further scientific discourse.

2 Although this quotation is partly attributed to the Roman orator and statesman Marcus Tullius Cicero (106 - 43 BC), it is likely to be of unknown origin due to the lack of comprehensible references.

Editorial notes

It is pointed out that in the present paper the generic masculine is used for reasons of legibility. However, the use of the masculine form of a word always includes the feminine form.

In addition, in the present treatise the use of the Eszett (after the Fraktur font - "sz"; "ß") is completely abandoned and is replaced by a "double s". However, quotations remain unaffected by this, since a falsification of any kind is to be avoided.

Insofar as implementation has already taken place in the respective jurisdictions, the European Case Law Identifier (ECLI) is used to cite court decisions. Similarly, secondary law under Union law is cited using the European Legislation Identifier (ELI).

Furthermore, it should be noted that with regard to citation, the abbreviation and citation rules (AZR), 8th edition, Vienna, 2019, by Peter Dax and Gerhard Hopf, are predominantly followed.

Furthermore, it should be noted that temporal data without further specification, as in the case of temporal adverbia (e.g. current/current/currently an amendment of a certain area of law is being sought), refer in case of doubt to the publication date of the scientific paper in question.

Finally, it should be pointed out that information from legal authorities without any additional country information refers in case of doubt to the Liechtenstein laws, unless an allocation is already clear, as is the case with the German KWG or the Swiss OR. If the ABGB is quoted, the Liechtenstein ABGB is meant; the Austrian basis for the prescription is quoted as ÖABGB, unless the context indicates which law is meant.

In addition, it should be noted that this paper is divided into two titles. This is because the individual papers were submitted to the University of Liechtenstein as master theses within the framework of the LL.M. in Company, Foundation and Trust Law ("Token as Value Rights"), as well as in LL.M. Banking and Finance ("Token Offerings and Decentralized Trading Centers"). References (chapter information, marginal numbers, footnotes) are generally to be seen independently and refer to the respective work (the respective title), unless a general reference is noted. The present work is a reprint of the master theses submitted to the University of Liechtenstein.

Addendum to the 2nd edition – May 2020

In this slightly revised 2nd edition of my work, minor concretisations of the content have been made, as well as various orthographic errors have been corrected. The essence of the work remains unchanged and is still written from the point of view of November/December 2019. Formulations that refer to laws "de lege lata" refer to the status as of the end of 2019, but the changes brought about by the Liechtenstein Block Chain Law (TVTG), which has since entered into force, have been taken into account in this work anyway (with the note "de lege ferenda").

Further discussion and updating will certainly be necessary in the future. Since the present work is to be understood as part of a (future) series on Liechtenstein banking and financial market law, other authors are also cordially invited to contact me and, if necessary, to write (guest) contributions on the topic in question, to contribute their thoughts in some other way, or to assist with translations into other languages in order to actually realize this bold undertaking in the long term and to make the work accessible to a broad public at the same time.

I would like to take this opportunity to thank my colleague Wolfgang Fürnschuss and the law firm Advocatur Seeger, Frick & Partner AG, Schaan, who successfully defended the illegitimate intellectual property claims of my opponents on this work before the Liechtenstein courts (legally binding proceedings on 04 CG.2019.409 of May 12, 2020), which contributed significantly to the fact that my work can be published again.

"The censorship is the younger of two shameful sisters, the older one is called Inquisition. “3

"A censor is a pencil or pencil-man; a line made flesh over the products of the spirit, a crocodile that lies on the banks of the stream of ideas and bites the heads off the poets swimming in it.4

Knowledge is free! The pencil made flesh and the man made pencil or the crocodiles lurking at the stream of ideas were slain by the sword of Justice!

Gams, May 2020 Josef Bergt

PS: This work has also been published in other languages. Translations from the original, which was written in German, were done using deep learning or machine learning methods based on artificial neural networks (artificial intelligence). While the translations are not perfect, they convey the relevant ideas and messages. Without artificial intelligence a translation would not have been possible on such short notice.

ISBN of the German version: 978-3-7504-2737-2

3Johann Nepomuk Nestroy, Freedom in Crow's Nest I, 14th century.

4Nestroy, freedom in crow's nest, pieces 26/I, 26 f.

Table of contents

Preface / Acknowledgement

Editorial notes

Addendum to the 2nd edition – May 2020

List of abbreviations

Token as value rights

Token Offerings and decentralized trading centers

Bibliography

Judicial Register

Digital sources

Abstract

curriculum vitae

Table of contents

Preface / Acknowledgement

Editorial notes

Addendum to the 2nd edition – May 2020

List of abbreviations

Token as value rights

Introduction, research question & basic questions on tokens

1.1 Blockchain & Smart Contracts

1.2 Token, coins and standardization despite depositum regulare

1.3 Conclusion tokenised property right

Securities according to PGR and their functions

2.1 indicative and evidentiary value

2.2 Liberation and legitimation function

2.3 Presentation or traffic protection function

2.4 Transport function

2.5 Conclusion on functions under securities law and their application to book-entry securities under the TVTG and PGR new

Tokens as dematerialised securities de lege lata?

3.1 Transfer of value rights

3.2 Maintenance of the share register on a block chain

3.3 Conclusion share register on the Blockchain

3.4 Securities vs. transferable securities according to MiFID canon

3.5 Endorsement and pure name papers in the form of tokens

Civil law classification of tokens under the Liechtenstein "Blockchain Act" (TVTG)

4.1 Value rights according to TVTG (abstraction principle) and PGR (causality principle)

4.2 Conclusion Abstraction and causality principle after introduction of the TVTG

Tokenization in individual and collective investments

5.1 Demarcation issues of collective investment (fund structures)

5.2 Tokenised shares in SPVs and fund units

5.3 Segmented Co-operatives (PCC) in distinction to the Fund

5.4 Conclusion Tokenisation of financial instruments and Collective Investment Schemes

Tokens and consumer law

Main results

7.1 The mapping of the full right of ownership in a token

7.2 Value rights according to TVTG and value rights according to PGR as amended by BuA 2019/93 (LGBl 2019.304)

7.3 Tokenisation in collective investment structures and segmented associations

7.4 Consumer transactions iZm Token

Token Offerings and decentralized trading centers

Introduction and subject matter of the investigation

1.1 Financial market law assessment of DLT-based business models

1.2 Official practice of the Financial Market Authority Liechtenstein

Financial market law analysis of tokens

2.1 Characteristics and scope of application of the BankG

2.2 Token Offerings and Banking Transactions

2.2.1 Banking business (deposit business)

2.2.2 Definition of deposit and e-money business and financial instruments

2.2.3 Conclusion Accruals and deferrals for deposit and e-money business

2.2.4 Banking transactions (lending business)

2.2.5 Conclusion Acquisition and factoring business

2.3 Tokens as financial instruments

2.3.1 Transferable securities

Standardization

Tradability on the capital market

Transferability

2.3.2 Equity, equity-like und non-equity transferable securities

2.3.3 Derivatives transactions

Commodity derivatives

Difference to traditional or commodity documents (civil law)

2.3.4 Units in undertakings for collective investment

2.3.5 Conclusion on the supervisory perspective of tokenization

2.4 Regulated markets, MTF & OTF, SI

2.4.1 Multilateral Trading Facility (MTF)

2.4.2 Conclusion MTF

2.4.3 Organised Trading Systems (OTF)

2.4.4 Systematic internalisers (SI)

2.4.5 Overview of organised trading venues

2.4.6 Conclusion Organised trading venues

2.4.7 Reproduction of a CCP for utility tokens and advantages of the block chain

2.5 DEX as a trading venue and other investment services

2.5.1 Acquisition brokerage

2.5.2 Portfolio management, investment advice and financial analysis

2.5.3 Conclusion Frontend and Backend of a DEX, Market Making and SI

2.5.4 TVTG and DEX

2.5.5 Conclusion Bulletin Board and DEX as VT price service provider?

2.5.6 Data provision services and bulletin boards

2.6 Prospectus considerations

2.6.1 Definition of securities and public offer

2.6.2 Exemptions from the obligation to publish a prospectus

2.6.3 Conclusion Players on a DEX and prospectus requirement

2.7 Stablecoins and e-money

2.7.1 E-Money Act - scope of application

2.7.2 Conclusion on the territorial scope of the electronic money regime

2.7.3 tokens as e-money, wallets and certain payment accounts for e-money

2.7.4 Conclusion monetary value and management of e-money on wallets

2.7.5 E-money and exemptions

2.7.6 Trading of Stablecoins and e-money using the example of Tether

2.7.7 Conclusion bilateral and multilateral action on electronic money

2.7.8 Monetary value - Revival of the ringtone clause?

2.8 Payment services and token-based business models

2.8.1 Strong customer authentication

2.8.2 Exemptions from the authorisation according to ZDG

2.8.3 Conclusion Exceptions according to ZDG under PSD II

2.9 Exchange offices according to SPG as amended by LGBl 2009.047 and 2019.302

2.10 Conclusion on money laundering prevention and other financial intermediaries

Overview of regulatory aspects of the TVTG

Central results

4.1 Banking transactions, e-money, financial instruments and virtual currencies

4.2 Central and decentralized trading centers

Bibliography

Judicial Register

Digital sources

Abstract

curriculum vitae

List of abbreviations

aA

dissenting view

ibid.

at the place stated/specified

OJ C

Official Journal of the European Union (notices and announcements)

OJ L

Official Journal of the European Union (legislation)

TFEU

Treaty on the Functioning of the European Union

aF

old version

AIFMD

Alternative Investment Fund Manager Directive 2011/61/EU

Note

Note

API

Application Programming Interface

ATS

alternative trading system

BankG

Banking Act (Liechtenstein)

BTC

Bitcoin

BuA

Report and request of the Government to the Parliament of the Principality of Liechtenstein

BWG

Banking Act (Austria)

CCP

Central Counterparty (clearing house)

CFD

contract for difference

CRD

Capital Requirements Directive (CRD IV, 2013/36/EU; CRD III, 2006/48/EC)

CRR

Capital Requirements Regulation EU/575/2013

CSDR

Central Securities Depositories Regulation EU/909/2014

DAO

Decentralised autonomous organisation

Del Regulation

Delegated Regulation

DEX

decentralized exchange

DGSD

Deposit Guarantee Schemes Directive 2014/49/EU

DLT

Distributed Ledger Technology

DVO

Implementing Regulation

DvP

delivery versus payment

EAG

Deposit Guarantee and Investor Compensation Act (Liechtenstein)

EBA

European Banking Authority

eg

gratuitous example

EGG

E-Money Act (Liechtenstein)

ELI

European Legislation Identifier

EMD / E-Money Directive

E-Money Directive / E-Money Directive (E-Money Directive II, 2009/110/EC; E-Money Directive I, 2000/46/EC)

EMIR

European Market Infrastructure Regulation EU/648/2012

ESMA

European Securities and Markets Authority

etc pp

et cetera perge, perge

ETH

Ether

ECB

European Central Bank

FAGG

Distance and Foreign Trade Act (Liechtenstein)

FCA

Financial Conduct Authority (UK)

FernFinG

Remote Financial Services Act (Liechtenstein)

ff / et seqq

Continuing / et sequentes

FINMA

Swiss Financial Market Supervisory Authority (CH)

BaFin

Federal Institute for

Financial services supervision

FMA

Financial Market Authority (Liechtenstein or Austria)

FMAG

Financial Market Supervision Act (Liechtenstein; as amended BuA 2019/93 and LGBl 2019.303)

FN

Footnote

GewG

Trade Act (Liechtenstein; as amended by BuA 2019/93 and LGBl 2019.305)

GRC

Charter of Fundamental Rights

GW-RL

Money Laundering Directive (5th Money Laundering Directive, 2018/843; 4th Money Laundering Directive, 2015/849)

Ibid / ibid

Ibidem / ibidem

IDD

Insurance Distribution Directive EU/2016/97

Idem / ders

the same

idF

in the version

idS

in that sense

ie

id est

iSd

for the purposes of

ITS

Implementing Technical Standards

IUG

Investment undertaking law (Liechtenstein)

iVm

in conjunction with

JCD (EEA)

Joint Committee Decision (Decision of the EEA Joint Committee)

Clause Directive

Clause Directive 93/13/EEC

KMG

Capital Market Act (Austria)

KSchG

Consumer Protection Act (Liechtenstein)

KWG

Banking Act (Germany)

leg cit

legis citatae

LES

Liechtenstein Collection of Decisions

LGBl

National Law Gazette (Liechtenstein)

LJZ

Liechtenstein Lawyers' Newspaper

MAD

Market Abuse Directive 2014/57/EU

MAR / MMVO

Market Abuse Regulation EU/596/2014

MiFID

Markets in Financial Instruments Directive (MiFID II, 2014/65/EU; MiFID I, 2004/39/EG)

MiFIR

Markets in Financial Instruments Regulation EU/600/2014

MTF

Multilateral Trading Facility

mwN

with additional evidence

NCA / NSA

National Competent Authority / National Supervisory Authority

nF

revised version

NFC

Non-financial counterparty

OR

Code of Obligations (CH)

OSI

Open Systems Interconnection Model

OTC

Over the counter (off-exchange)

OTF

Organised Trading Facility

PERG

The Perimeter Guidance manual

PGR

Law on persons and companies (Liechtenstein; (as amended by BuA 2019/93 and LGBl 2019.304)

PoS/PoW

proof-of-work / proof-of-stake

Prospectus regulation

Prospectus Regulation EU/2017/1129

PSD

Payment Service Directive (PSD II, EU/2015/2366; PSD I, 2007/64/EC)

RTS

Regulatory Technical Standards

Rz

Margin number/edge number

s

see

sa

see also

SI

Systematic internaliser

sl

sine loco (without place)

Solvency II

Solvency II Directive 2009/138/EC

SPG

Due Diligence Act (Liechtenstein; (as amended BuA 2019/93 and LGBl 2019.302)

SPV / SSPV

Special Purpose Vehicle Securitization Special Purpose Vehicle

SR

Property law (Liechtenstein)

SSI

Self-Sovereign Identity

SSM REGULATION

Single Supervisory Mechanism Regulation EU/1024/2013

SteG

Tax law (Liechtenstein)

StGH

State Court of Justice (Liechtenstein)

STSR

Simple, Transparent and Standardized Regulation or Securitization Regulation or Securitization Regulation or Securitization Regulation EEU/2017/2402

TVTG

Law on Tokens and Trusted Technology Service Providers (Liechtenstein; as amended by BuA 2019/93 and LGBl 2019.301, unless otherwise noted)

and the like

and the like

UCITSD

Undertakings for Collective Investments in Transferable Securities Directive 2014/91/EU

USDT

US dollar tether

UVS

Independent Administrative Senate (Austria)

VersAG

Insurance Supervision Act (Liechtenstein)

VersVertG

Insurance Distribution Act (Liechtenstein)

VnB

Consultation report (Liechtenstein)

VRRL

Consumer Rights Directive 2011/83/EU

WAG

Securities Supervision Act (Austria)

ZDG

Payment Services Act (Liechtenstein)

I. Token as value rights

Since the present theses deal in particular with Liechtenstein law, this work should be introduced with the following quotation about the "Crypto Country" Liechtenstein: "In the past, transaction banking, and especially the field of fintech, has grown more important for the Liechtenstein market.5

1. Introduction, research question & basic questions on tokens

In this Part I - "Tokens as book-entry securities" - in contrast to Part II - "Token Offerings and Decentralized Trading Centers" - the focus will be on the civil law classification and transfer regulations of crypto currencies and tokens under Liechtenstein law. The goal of Part I is to examine whether tokens can be treated analogously to securities or generally as dematerialized securities - i.e., book-entry securities - or at least can be designed as such. In this respect, the possibility of representing rights - in assets and in the person6 - is to be investigated.

The aim is to investigate the representation of rights in tokens both de lege lata, at the time of publication of this work and thus 7before the TVTG enters into force, and de lege ferenda, after the implementation and entry into force of the TVTG with 01.01.2020. In the absence of an element of the physicality8 of tokens, it seems inappropriate to speak of the securitization of rights, as is the case with securities.9 Rather, the concept of property rights or value rights seems to be more appropriate. It will be examined how the PGR,10 prior to the amendment of the civil securities law provisions in the final section of the PGR, treats such dematerialised or dematerialised securities in the context of the implementation of the TVTG and how it deals with circumstances which provide for such dematerialised securities in the business model; nevertheless, the positive provisions de lege ferenda which the TVTG itself, and in particular the amendment of the final section of the PGR, entail in this respect will also be examined.

Consequently, it is also necessary to distinguish the civil law concept of securities from the concept of transferable securities or financial instruments that are transferable under supervisory law. In this respect, it is necessary to examine not only whether tokens can represent book-entry securities, but also whether tokens can represent 11financial instruments held in the giro account, i.e. financial instruments held in the books. In this context, the representation of book-entry securities by means of tokens, the representation of financial instruments by means of a token and collective investments in connection with tokens will be examined in more detail in Part II of this thesis.

In line with the above, the differences between individual and collective asset investments in connection with the tokenisation of financial instruments and portfolios are to be worked out in a differentiated manner. Subsequently, the company law aspects of funds in connection with an investment company as12 opposed to a stock corporation in the form of a segmented association13issuing segment shares14, again as opposed to so-called securitisation special purpose vehicles15, are to be dealt with.

The concrete research question of the present study is thus: Can tokens represent dematerialised securities - i.e. book-entry securities - under Liechtenstein law and what differences arise in the assessment before and after the entry into force of the TVTG? The research question is: Can tokens represent not only civil law book-entry securities from the perspective of supervisory law, but also financial instruments held in the securities giro, and how do new technical possibilities relate to classically regulated institutions such as fund structures?

While the work under Title I. focuses on Liechtenstein law, especially for the sub-research question, European legal acts in connection with fund regulation must be consulted in addition to national provisions.

Before an in-depth examination of the content of the above-mentioned topics, the following is an overview of block chain technology, smart contracts, tokens and coins. It should be noted that technical aspects are presented in a simplified form in order to provide a rough overview of the technologies mentioned and to make the legal argumentation comprehensible when dealing with legal issues that arise in connection with technical aspects of these technologies. Furthermore, it should be noted that the term "block chain" or "block chain technology" is used in this paper as pars pro toto for the so-called distributed ledger technologies and related technologies whose most prominent application is the block chain technology.

1.1 Blockchain & Smart Contracts

A block chain is a technical design of distributed ledger technology and is characterized as a public and decentralized register or data storage system that permanently records transaction data. The public means that16 every transaction on a block chain that has been stored can be publicly viewed.17 The permanence results from the cryptographic scattering value or hash functions (a scattering value function which is collision resistant, which means that it is not possible to find different input values which result in the same hash value), on which the technology is based, which guarantee that the transaction history cannot be corrupted or compromised with today's conventional technology and is this stability or technical redundancy closely related to decentralisation. Decentrality means that there is no central instance responsible for the database. Instead, a large number of "nodes" (network participants) in a peer-to-peer network (decentralized network; decentralized autonomous organization) constantly synchronize18transaction data. If a network node is lost, this does not endanger the stability or functionality of the network itself.19

Torrent networks are also decentralised. These differ from the block chain in that states are not transferred once (prevention of double spending on the block chain), but content can be multiplied - for example in connection with file sharing protocols.

A transaction on a block chain shows in its most basic form the source, the destination(s) and a specific value20to be transferred. The source and destination are also known as addresses in a block chain21, whereby everyone is free to create new addresses. If such an address or public key is created, an additional unique alphanumeric character string is automatically generated and assigned to the public key (the "private key"22). As a rule, only one private key is assigned to each public key, although there are also so-called "multi-sig procedures" ("multi-signature") in which several private keys are assigned to one public key and several private keys are also required to carry out a transaction.23

Apart from the permanent storage of transaction data, a block chain ensures that each transaction request is verified and confirmed with the content of an instruction to transfer a value from one address to another. Confirmed transaction requests are then stored on the block chain, thereby generating the name-giving and symbolic data chain of a block chain. Each block in a block chain has a hash or scatter value function (algorithm or mathematical function), which is generated from the preceding, already verified data record and thus creates a data hierarchy. This process, known as "mining" or "minting",24 continuously extends the transaction history.25

The confirmation of transactions does not take place on a case-by-case basis, but several transactions are confirmed en bloc at the same time and stored in a new block on the block chain. On average, a block is created on the Ethereum block chain approximately every 13 seconds at the time of writing this paper.26 In addition to the basic functions listed above, block chains such as Ethereum also enable the execution of decentralized programs or applications (decentralized apps; dapps; Smart Contracts). Smart Contracts execute certain tasks according to their programming code and are usually based on if-then-else statements (if condition A occurs, action B is executed, otherwise C is executed).27 The term "smart contract" was coined by Szabo in 1994: "A smart contract is a computerized transaction protocol that executes the terms of a contract. The general objectives of smart contract design are to satisfy common contractual conditions (such as payment terms, liens, confidentiality, and even enforcement), minimize exceptions both malicious and accidental, and minimize the need for trusted intermediaries. Related economic goals include lowering fraud loss, arbitration and enforcement costs, and other transaction costs. Some technologies that exist today can be considered as crude smart contracts, for example POS terminals and cards, EDI, and agoric allocation of public network bandwidth.28

In his manifesto on Smart Contracts, Szabo indicates that the considerations in this regard go back even further, namely to so-called agoric computing29, which has its origins in the 1970s and 1980s.30

1.2 Token, coins and standardization despite depositum regulare

The TVTG as amended by BuA 2019/54 defines a token as an information on a decentralized database (VT system, which guarantees the secure disposal of tokens), which can represent rights and to which VT identifiers or identifiers are assigned.31 According to this legal diction, it could be concluded that tokens are information on a decentralized database that represent rights, while a coin is a subtype of a token that does not represent rights and is necessary for the proper functioning of a block chain (protocol token or protocol coin) and whose value is measured by supply and demand on the market, which is why it does not represent an object without intrinsic value even if accepted as a medium of exchange and therefore is not to be treated as fiat money32but as virtual currency. From a technical point of view, it is in any case the other way round and a coin represents the native unit of a block chain, while tokens use the same technical standard as the native coin.33

But even the wording of the law merely indicates that there are tokens that represent rights as well as tokens that do not represent rights (arg "an information that can represent rights."34) Technically speaking, a token is software35 and as such part of a two-factor authentication security measure used to authorize the use of software-based services.36 It cannot be inferred from the legal materials, nor can it be assumed, that coins are a subtype of tokens and do not represent rights. It is also conceivable that a protocol token or native token, with which transactions can be carried out on a block chain, represents the ownership of goods such as precious metals. It37 would be essential that the right in rem to such merchandise is represented in the token and that the person authorized to dispose of38 the token thus also has full rights to the specifically represented object. As a consequence of the full right of ownership of the represented object, the person authorized to dispose of such a token also has the right to claim restitution of this object. In order to effectively create commodity money or a gold standard, the object to which the right of ownership is represented in the token would have to be held in regular custody (depositum regulare). The custodian would take the object into custody for the owner by order of the owner (person entitled to dispose of the token) as a third-party owner (ownership agent).39

A person entitled to dispose of such a token, which represents the right of ownership of a commodity, could also, at his own discretion, act as owner of the object whose right is represented (erga-omnes effect of rights in rem as opposed to inter partes effect between the parties to the contract). When the person entitled to dispose of the token via the block chain transfers the token, the ownership of the specified object is transferred at the same time (in the concrete case by means of a possession order to the custodian, who from now on indirectly owns the object for the new person entitled to dispose of the token).40 Since there is a real claim to the object to which the right of ownership is represented in the token, this can also be demanded or indexed at any time by the person authorized to dispose of the token.41

It should be noted that a depositary must return the same items that42have been placed in safe custody in accordance with the provisions of the depositary agreement.43 Even if a custodian only has to return items of the same type and quality44, regular custody may still be required. What matters is what is stipulated with regard to ownership. If the custodian is to become the owner, there is an irregular custody (depositum irregularum); if the depositor remains the owner, there is regular custody. The decisive factor for regular custody is therefore that the depositor remains the owner.45 The mixing or exchange by the depositary of objects with objects of the same type and quality and of the same size does not affect a conditional regular custody agreement, as long as the depositary does not have the right to dispose of the object for his own benefit and the depositor can therefore make a proxy at any time.46

Thus, in the case of a corresponding custody agreement, the person entitled to dispose of a token, which represents the right of ownership of an object, is to be seen as the owner of an object - e.g. an object placed in custody via a possession order. There is not only a claim under the law of obligations, provided that the custodian has no right of disposal in his own favour over the deposited object and the depositor still has the intention to remain owner. This is sometimes essential in order to exclude the existence of a tokenised financial instrument, as there is no standardisation in this respect47, but rather an individualised property right. As a48 consequence, even assuming that such a token represents a (dematerialised) traditional paper49, the functional equivalence to financial instruments must be denied, as there are no exchangeable shares.50 By means of an agreement between the parties, it is nevertheless possible to agree that a custodian can make a debt-discharging payment to the party entitled to dispose of a token if he issues goods of the same type and quality and to the same extent, which does not alter the existence of regular custody. In effect, therefore, standardisation could take place at the level of the custody agreement by means of a corresponding agreement, without this constituting a financial instrument.

1.3 Conclusion tokenised property right

A block chain is a decentralized, public and permanent database. Depending on the design of the read and write rights, it can be used for different purposes. The Bitcoin and Ethereum protocols are "public" and "open" block chains. In this context, "public" means that, unlike "private" block chains, everyone has write permissions, while an "open" block chain is based on public read permissions as opposed to "closed" block chains.

From a purely technical point of view, a token can be seen as a data record or software that is subject to a two-factor authentication security measure and can subsequently be used to authorize software-based services. With such a multi-factor authentication, a user of a computer program is only granted access if sufficient evidence or factors for authentication are proven. Such factors are based on the elements knowledge, possession and inherence, which are also found in connection with strong customer authentication according to PSD II.

Coins or - in the diction of the TVTG - token are regularly used on a separate block chain. Unlike such Coins, Tokens are not generated by mining, but are issued on an existing block chain, for example in the course of a fundraising. This terminology is widely used, especially in the technical field, but has no particular impact on legal assessments and thus the terms coins and tokens can be used synonymously as far as possible.

Even if coins in the above sense do not necessarily have to represent rights, they are not to be seen as fiat money (meaning not only paper money, but also book money and e-money), as these have an intrinsic value in the sense of virtual currencies in connection with consensus building on a block chain, or may have other functions which are inherent to the decentralised protocol.

Blockchains regularly use so-called Smart Contracts, which can be contracts in the legal sense, but are primarily permanent scripts and are based on Agoric Computing.

Tokens do not represent a thing in the sense of Liechtenstein property law due to lack of physicality. Only with the entry into force of the TVTG on 01.01.2020 will the provisions of property law be applicable to tokens by analogy. Irrespective of this, the principle "Substance over Form" applies and must be looked through to what a token represents. If, for example, a custodian holds an object in safe custody for a person entitled to dispose of a token in accordance with the depositum regulare, such a token effectively represents the right of ownership of the object placed in safe custody.

2. Securities according to PGR and their functions

The securities are regulated in §§ 73 ff of the Final Division of the PGR. For the purposes of the PGR, securities are documents in which a right is securitised so that it can only be realised, asserted or transferred with the document. In addition, the provisions on share certificates apply to securities.51 A similar definition can be found in Art. 965 of the Swiss Code of Obligations. It should be noted that the PGR is based on Eugen Huber's first draft for the revision of Titles 24 to 33 of the Swiss Code of Obligations of 1919, which has never been implemented in Switzerland in this form. In52 contrast to Austria and Germany, both Liechtenstein and Swiss law thus provide a legal definition of the term "securities".53

The securitisation is intended to achieve even greater marketability and tradability. There are various principles that apply to securities, and these principles are understood to be the functions of securities to ensure the rapid and secure transferability or assertion of securities rights. The simple transfer is achieved by the transfer of the security (transport function). Furthermore, the security document serves as evidence and a debtor can only make payment to the person who is entitled to it by means of the document; an agreement on the transfer, as is the case with the assignment of claims by means of assignment, is 54not necessary (liberating function for the debtor to the person entitled to the security, thus liberating the debt; at the same time, the entitlement to receive the payment - the legitimation - is shown by presenting the security that certifies a certain right; the assumption applies that the holder of the security is also entitled to dispose of it)

The embodiment of a right in a deed also has the circumstantial effect or carries with it the proof that the right actually exists according to the content of the deed (indicative and evidentiary function). The right is acquired to the extent described in the security and non-securitised agreements are irrelevant (limitation of objection or exclusion of objection in connection with the evidentiary function or scriptural liability). The exclusion of objection is in turn closely related to the presentation or transaction protection function. The presentation function has the consequence that a debtor may only make payment to the holder of a security - who shows or presents it. The presentation function, which cannot be seen completely detached from the proof, liberation and legitimation function, ultimately leads to the transaction protection function, according to which the security can be acquired in good faith by the person not entitled to dispose of the security.55

Securities are thus characterised in particular by their evidentiary function, legitimation and liberation function, exclusion of objections, transport function, and presentation and traffic protection function. The marketability is thus protected in particular by the possibility of acquisition from the non-entitled party, but also by the enforceability of the securitised right independently of the right actually created or existing - apart from the deed - or, if need be, also modified in content.

2.1 indicative and evidentiary value

§ Section 73 of the PGR Final Division defines a security on the basis of three criteria. These are these one document, the securitization of a right in this document, and a certain connection between the document and the right.56 Thus, the right from a security cannot be realized, asserted or transferred to others without the certificate. The transfer component is essentially based on the transport function.57 A deed is a declaration under private law on a document.58 In such a document, rights of claim, membership or even property rights can be recorded. Rights of claim can be all claims under the law of obligations, while membership rights include certain rights in corporations - i.e. rights of control and/or participation. In addition, a security can also represent claims in rem. Such commodity (value) securities are securities that represent objects; the transfer of a commodity security corresponds to the transfer of the commodity itself.59

The aforementioned connection between deed and law is agreed upon by means of a securities clause. A security does not have a purely circumstantial effect, but legitimizes a certain person to demand a securitized service. By making a payment to the designated person, the debtor releases himself from his obligation. Such securities rights are also transferred by assignment of the deed and cannot be assigned in any other way.60 A security thus proves that a certain right exists vis-à-vis the issuer, which is owed according to the content of the document.61

2.2 Liberation and legitimation function

The liberation and legitimation effect of securities is regulated twice in Liechtenstein. On the one hand, § 1393 ABGB states that promissory notes in the name of the bearer - i.e. bearer securities - are assigned by delivery and therefore require no further proof apart from possession; the deed thus identifies the rightful creditor and legitimises the owner (in the case of bearer securities).62 On the other hand, § 74 para 2 of the Final Division of the PGR regulates the right of legitimation in connection with securities. This63 provision of the PGR stipulates that a debtor - unless he64 acts in bad faith or gross negligence and at, but not before, maturity - may make payment to the holder of a security in discharge of his debt. Even if the person who legitimates himself from the security should have lost his position as a creditor, the obligated party from the security can discharge his debt by paying the expelled person and does not have to pay the actually entitled creditor again.65 Legitimation and liberation are thus also connected to traffic protection.66

The possession of a security legitimizes the person identified by the paper as a creditor. Thus, the right of disposal does not have to be proven by a complete chain of transmission of the previous creditors. If the owner and thus creditor of a security presents the documented right, the debtor has to pay to the expelled person.67 As already explained, § 74 para. 2 of the Final Division of the PGR does not say anything about the material entitlement of the owner; the same also applies to § 1393 ABGB. However, the owner (in the case of bearer instruments) or, generally speaking, the expelled person is considered a creditor. If a debtor wishes to dispute the right of disposal of an expellee, he bears the burden of proof.68

As the second side of the same coin, the liberation function is the debtor's counterpart to the legitimation function of the person designated as entitled from a security. The debtor can only make payment in discharge of debt to the person who identifies himself as an entitled creditor by means of a security and must rely on the securitised document as evidence. The debtor can also make payment to a person who is not entitled to dispose of the debt, provided that the former identifies himself by presenting a security and hands it over.69 It should be noted that a debt-discharging effect on the previous creditor pursuant to § 1395 ABGB does not apply in securities law, since only those who are identified by means of a security are to be paid. In contrast to Austria, this cannot be justified under customary law for Liechtenstein, since here, going back to Art. 966 of the Choir, § 74 of the Final Division of the PGR states that a debtor is only obliged to make payment against presentation of the security by the person named in the deed and can also make payment to this formally correct creditor in discharge of debt.70

For registered securities, the exemption and entitlement effect is also regulated separately in § 83 of the Final Division of the PGR, which goes back to Art. 975 chOR. According to this provision, a debtor can only make payment in discharge of debt to the person who holds the registered security on the one hand and who also identifies himself as the person in whose name the security is registered. It71 is noteworthy that the PGR only speaks of possession or ownership72 and refers to the corpus element or the power of disposal, whereas the ABGB in its § 1393 explicitly refers to possession and thus also considers an animus element (will to keep a thing) to73 be necessary.

2.3 Presentation or traffic protection function

The presentation function results from § 74 para. 1 of the Final Division of the PGR. Accordingly, the debtor of a security is only obliged to perform against presentation and delivery of the security. If someone wishes to assert the right evidenced by a security without presentation of the security, the debtor must refuse performance.74

The securities are treated in terms of property law - the right on paper follows the right on paper.75 The transfer of securities made out to bearer is thus, with reference to Art 501 SR in conjunction with § 75 para. 2 of the Final Division of the PGR, in principle effectively effected by the transfer of the document. However, bearer securities, like other types of securities, may be transferred to the PGR in accordance with § 75 para. 1 of the Final Division of the PGR by means of a written contract and the transfer of the security. The owner of the security is subject to the legally rebuttable presumption that he is also the rightful owner. The transaction protection function is based on Art. 172 para. 2 of the SR and protects the bona fide purchaser of a security in his ownership of the security. This protects or guarantees the marketability of securities, as the defences against a bona fide purchaser of a security are limited; the bona fide purchaser cannot therefore make any indication of the marketability of the security. For securitized bearer securities, this limitation of defenses or market protection function is additionally derived from Art 514 SR, which explicitly states that bearer securities that have been lost to the owner against his will76 cannot be challenged by the person who acquired or received them in good faith.77

For order documents, traffic protection is also specifically regulated in § 88 of the Final Division of the PGR. This provision corresponds to Art 1146 chOR and its content is identical with § 96 (1) of the Final Division of the PGR (regulation for bearer instruments), which corresponds to Art 979 chOR. The purpose of the provision is to protect the market, since the debtor can only raise defences against a bona fide recipient which are based on the content and78 the valid status of the security or which the debtor is entitled to raise directly against the holder of the security.79

2.4 Transport function

The transport function of securities means, as the name implies, that securitised rights can be transferred simply by transferring the - possibly endorsed - securities certificate.80 The transport function is also derived from Art 73 (1) of the Final Division of the PGR, according to which rights securitized in a deed can only be transferred by transferring the deed.81

2.5 Conclusion on functions under securities law and their application to book-entry securities under the TVTG and PGR new

In the case of book-entry securities, the transport function is replaced by the entry in the book-entry securities register by handing over the securities certificate in accordance with the TVTG.82

In addition, book-entry securities have the same function as securities pursuant to Section 81a of the Final Division of the PGR as amended by the Federal Law Gazette 2019/93 (LGBl 2019.304). This means that the book-entry rights also have an immanent traffic protection function and that it must be possible to acquire in good faith the book-entry rights newly introduced into the PGR by means of the TVTG. "If the transfer of non-securitized debt securities does not have a legal basis comparable to that of ownership, this is certainly present in the case of book-entry securities in the form of the entry in the book-entry rights register that constitutes the book-entry right, provided that the Company ensures the reliable updating [...] of the book-entry rights register and issues the respective creditor with a certificate of proof of the non-public entry.83 The fact that the property law regime also applies to book-entry securities is apparent from the legislative materials on the TVTG, which also deal with the positively introduced book-entry securities in accordance with the PGR.84 In contrast, the principle of abstraction only applies to tokenized book-entry rights under the TVTG, while the principle of causality continues to apply to book-entry rights under the PGR.85 Thus, if an effective obligatory transaction does not materialize or is subsequently cancelled, the tokenized book-entry rights under the TVTG must be reversed under enrichment law, while book-entry rights can be re-indexed under the PGR.86

Finally, with regard to PGR book-entry rights, the legitimation and liberation function is now also linked to the entry in the book-entry rights register.

5Frick/Vogt in Barnes (Hrsg), Banking Regulation Review, S 318.

6 Cf. in this regard the alleged triad of property rights from the law on damages in § 1293 ABGB, which defines damage as a disadvantage to property, rights or the person. However, rights to property and to the person are already based on all conceivable rights, see Reischauer in Rummel, ABGB, 3rd edition, § 1293 ABGB, Rz 1.

7 Report and motion 2019/54 (or BuA 2019/93) of the Government to the Parliament of the Principality of Liechtenstein concerning the creation of a law on tokens and VT service providers (Token and VT Service Provider Act; TVTG) and the amendment of other laws; in practice, the TVTG is also often referred to as the "Blockchain Act", cf. Nägele/Bergt, Cryptocurrencies and blockchain technology in Liechtenstein supervisory law, Regulatory grey area? LJZ 2/18, p 63 (64); Nägele/Xander, Token Offerings, in particular Initial Coin Offerings (ICO) and Security Token Offerings (STO) as well as tokens in Liechtenstein law: Regulatory environment and outlook, Rz 18.53 in Piska/Völkel (ed.), Blockchain Rules; in its consultation report on the creation of a law on transaction systems based on trustworthy technologies (Blockchain Act; VT Act; VTG) and the amendment of other laws, which was adopted by the Government on 28 August 2018, the Government also referred to the VTG, which was in consultation at the time, as the "Blockchain Act".

8 BuA 2019/54, p. 62; the law of property does not define the concept of property, but refers to land and vehicle ownership in Art 20 SR in conjunction with Art 34 and Art 171 SR - see Arnet in CHK - Handkommentar zum Schweizer Privatrecht, Art 641 ZGB, N 6; idem, N 10: "Only material objects with a spatial extension can have material quality. Rights and energies are not things, but in some cases they are treated like things" - according to this, tokens, as digital representations of electronically or magnetically stored data and thus ultimately as electromagnetic energy, are not things according to this narrow concept of property law. Nevertheless, as software, tokens can represent digital content or merchandise, see Title II. Chapter II.2.2.2, FN 395.

9 No title to the claim can be established. However, if such a claim is documented in a deed, rights in rem can be ordered in this deed, which has a physicality in the form of paper, Arnet in CHK - Handkommentar zum Schweizer Privatrecht, Art 641 ZGB, N 10; the Liechtenstein concept of property law was received by Switzerland and is based, similar to the German BGB (§ 90 BGB), on impersonal, physical and spatially delimited objects that can be subjected to human control. The Austrian ABGB, on the other hand, which is based on natural law, is much more comprehensive and distinguishes between physical and incorporeal objects (§ 285 in conjunction with § 292 öABGB), Opilio, Arbeitskommentar zum liechtensteinischen Sachenrecht, Volume I, Art 20 SR, Rz 7 (p 32). In Austrian criminal law, energy was originally treated as a thing by means of authentic interpretation. Later this approach was rejected again and the concept of matter was again restricted to physical things, Wach in Triffterer/Rosbaud/Hinterhofer (Hrsg), Salzburg Commentary on the StGB, § 132 StGB, Rz 1 (S 1) mwN. While electrical energy in Austria is treated as a physical thing according to prevailing civil law doctrine, it remains controversial whether software is a physical thing or only if it is stored on a physical data carrier. However, data can represent immaterial things, Hofmann in Schwimann/Kodek, ABGB Praxiskommentar, § 292 ABGB, Rz 3 and 5 (p 15 f). This broad concept of property law in the Austrian ABGB is only programmatic in nature and is not consistently applied. Thus also the acquisition of good faith (§ 367 öABGB) is only viable in physical things, Kodek in Schwimann/Neumayr (Hrsg), ABGB Taschenkommentar, § 285 ABGB, Rz 3 (p. 448).

10 LGBl No. 2019.118.

11 Not to be confused with giro transferable securities according to Art. 392 ff SR, which constitute financial collateral.

12 AGmvK according to Art 361 PGR (public limited company with variable capital as counterpart to the SICAV - Société d'Investissement à Capital Variable prevailing in Luxembourg; not to be confused with the similarly named counterpart SICAF - Société d'Investissement à Capital Fixe).

13 Protected Cell Company (PCC) nach Art 243 PGR.

14 See BuA 2014/69, p. 49 (Art 243e para. 5 PGR).

15 Also called Special Purpose Vehicle (SPV).

16 Not all block chains are public per se. A distinction is made between "permissioned" or "private" and "unpermissioned" or "permissionless" or "public blockchains". "Public" and "private" refer to the "write permission", while "open" and "closed" refer to the "read permission". Bitcoin and Ethereum are thus "public" and "open" blockchains - anybody has read and write access to them. A public closed block chain, on the other hand, could be used to exercise anonymous voting rights. If transparency of certain entities is required, a private open blockchain makes sense. A private closed block chain would be the most suitable for public authorities. A possible use case for a permissionless or public block chain is, for example, the implementation of the so-called Self-Sovereign Identity (SSI) as a supplement and eighth level of the Open Systems Interconnection Model (OSI), which represents the reference model for network protocols (Physical Layer, Data Link Layer, Network Layer, Transport Layer, Session Layer, Presentation Layer and Application Layer). This can play an essential role especially in connection with data portability of verified data (identification, age verification, etc pp).

17 Read permission; the write permission - as for example by transmitting a state by means of a transaction of tokens - is usually also publicly accessible, but causes an effort, which is why transaction fees are charged for a write permission. On the Ethereum protocol, transaction fees are incurred in the form of gas. Gas is the Wei (subunit of ether) required to execute the lines of code.

18 Also called "broadcasting of states".

19 For further information, see Büch, Die Blockchain und das Recht, LJZ 2/18, p 55 (p 55 f); see also Nägele/Xander, Token Offerings, in particular Initial Coin Offerings (ICO) and Security Token Offerings (STO), as well as Token in Liechtenstein Law: Regulatory Environment and Outlook, margin no. 18.4 in Piska/Völkel (Hrsg), Blockchain Rules; cf. also the prospectus of Hydrominer IT-Services GmbH dated 26.11.2018, pp. 87 and 125 f, https://www.hydrominer.org/wp-content/uploads/2018/11/Hydrominer-H3O-Prospectus_2018-11-26_approved.pdf, accessed on 04.08.2019, 00:58.

20 "Source, target and value.

21 An alphanumeric character string generated according to mathematical rules (the address or "public key"; also referred to as the public key in Art 5 Para. 1 No. 2 VTG in the version of the consultation report - or later amended to the technology-neutral VT identifier in Art 2 Para. 1 lit e TVTG as amended by Federal Law Gazette 2019/54) A VT identifier enables the unique assignment of tokens and thus serves as an identifier (BuA 2019/54, p. 145). According to the Duden, an "identifier" is understood to be a "characteristic feature, sign or totality of characteristic features, sign for the unambiguous identification of something", cf. the definition in the Duden, https://www.duden.de/rechtschreibung/Kennung, accessed on 04.08.2019, 00:46.

22 With asymmetric or public-key encryption, it is not necessary for communicating parties to know a common secret key, since each user generates an independent key pair. The public key can be used to encrypt data, which in turn can be decrypted with the corresponding private key.

23 This is also referred to as an "m-of-n transaction", since N private keys are assigned to a public key and at least M private keys are required for a transfer of tokens from this address (e.g. 2 of 3; comparable to the structure of subscription rights under company law); cf. prospectus of Hydrominer IT-Services GmbH dated 26.11.2018, p 87 and 125 f, https://www.hydrominer.org/wp-content/uploads/2018/11/Hydrominer-H3O-Prospectus_2018-11-26_approved.pdf

24 In the case of Bitcoin, a Proof of Work (PoW) mechanism was implemented by providing computing power (proof of work by solving a mathematical task). Among other things, the so-called Proof of Stake System (PoS) is also frequently encountered. The consensus in the network is formed by a weighted proof of participation (e.g. duration of participation and number of tokens held). The type of consensus mechanism also partly depends on the type of block chain - see FN 16.

25Büch, Die Blockchain und das Recht, LJZ 2/18, p 55 (p 55 f); Prospectus of Hydrominer IT-Services GmbH dated 26.11.2018, p 87 and 125 f, https://www.hydrominer.org/wp-content/uploads/2018/11/Hydrominer-H3O-Prospectus_2018-11-26_approved.pdf. A transfer of states is only confirmed by the network if it complies with the protocol rules (e.g. it must be ensured that the transferor actually has the number of tokens to be transferred, furthermore no double-spending is allowed, etc). For proper authorization, each transaction must be signed with the private key.

26 accessed October 19, 2019, 13:20.

27 Prospectus of Hydrominer IT-Services GmbH dated 26.11.2018, p. 126f, https://www.hydrominer.org/wp-content/uploads/2018/11/Hydrominer-H3O-Prospectus_2018-11-26_approved.pdf; the name "Smart Contract", which refers to a contract, is rather misleading, especially as a Smart Contract is a manipulation-proof, self-checking and self-executing script. Such a script can also represent a contract in a legal context, especially since contracts themselves can be concluded verbally or by implication. Cf. also Buterin, 13.10.2018, 10:21, https://twitter.com/VitalikButerin/status/1051160932699770882?ref_src=twsrc%5Etfw, called on 30.09.2019: "To be clear, at this point I quite regret adopting the term 'smart contracts'. I should have called them something more boring and technical, perhaps something like "persistent scripts.

28Szabo, Smart Contracts, 1994, https://web.archive.org/web/20011102030833/http://szabo.best.vwh.net/smart.contracts.html (only archive link available anymore).

29 From Greek ἀγορά for collection point or market place.

30 Vgl Miller/Drexler, The Agoric Papers in The Ecology of Computation in Huberman (Hrsg), Markets and Computation: Agoric Open Systems, Incentive Engineering: for Computational Resource Management, Comparative Ecology: A Computational Perspective 1988, https://e-drexler.com/d/09/00/AgoricsPapers/agoricpapers.html; vgl auch Wozke, Smart Contracts: Wenn Verträge zwischen Computern geschlossen werden, 11.07.2017, https://blockchain-hero.com/smart-contracts-vertraege-zwischen-computern/, aufgerufen am 01.10.2019, 21:14.

31 Art 2 Paragraph 1 lit c TVTG as amended by BuA 2019/54.

32 For the definition of fiat money, electronic money as fiat money and virtual currencies, see Title II, Chapter II.2.9.

33 For example, from a purely technical point of view, ether would be seen as a coin, while tokens that are ERC-20 compliant (Ethereum Request for Comment Standard 20) would be a subspecies of this coin standard and thus would be tokens. Note that there are also native coins that represent rights. Following the TVTG, these would then be (native) tokens (protocol tokens) representing rights; Nägele/Bergt, Kryptowährungen und Blockchain-Technologie im liechtensteinischen Aufsichtsrecht, Regulatische Grauzone?, LJZ 2/18, S 63 (64); cf. https://de.bitcoinwiki.org/wiki/Coin, called on 08.08.2019, 20:10: "Coin is a cryptocurrency with its own blockchain, usually created by developers from scratch or by forking. You can also find the term "altcoin", which implies an alternative coin, that is any coin that is not Bitcoin"; see also https://de.bitcoinwiki.org/wiki/Token, called on 08.08.2019, 20:10: "Tokens are different from bitcoins and altcoins in that they are not mined by their owners [...] but [meant] to be sold for fiat or cryptocurrency in order to fund the start-up's tech project."Thus, coins are mostly used - in addition to other functions - in connection with consensus building by means of a consensus algorithm (e.g. proof-of-work or proof-of-stake) of a block chain.

34 Art 2 Paragraph 1 lit c Z 1 TVTG as amended by BuA 2019/54.

35 Hence software tokens, whereas hardware tokens are stored on a physical device (hardware wallet); cf. with regard to tokens as data or software in the sense of merchandise and thus a token with intrinsic value (token) as opposed to tokens as representation of a claim or membership rights (e-money or deposits or membership and claim rights in the sense of financial instruments) Title II. Chapter II.2.2.2II.2.3.

36Rosenblatt/Cipriani, Two-factor authentication: What you need to know (FAQ), 15 June 2015, https://www.cnet.com/news/two-factor-authentication-what-you-need-to-know-faq/, accessed 28.08.2019, 21:32; Petruș, How to extract data from a 2FA iCloud account, 12, August 2019, https://www.iphoneback-upextractor.com/blog/extract-data-two-factor-authentication/, called on 28.08.2019, 21:34; multi-.or two-factor authentication is a method of authentication in which a computer user is only granted access if he/she provides two or more proofs (factors) of an authentication mechanism. The factors refer to the elements knowledge, possession and inherence. These elements correspond to those of strong customer authentication according to PSD II, see Title II. Chapter II.2.8.1.

37 Thus, for example, a gold currency or gold standard could be formed, whereby, according to economic monetary theory, this would increase the velocity of tokenised gold and, as a consequence, destroy the value-preservation character of gold to a certain extent.

38 The rewriting by the person who can legally dispose of the token seems to be the dogmatically only practicable solution, since an ownership would be based on the corpus element (power of disposal), whereas an owner needs an animus (possidendi) in addition to the corpus (animus rem sibi habendi or animus rem alteri habendi). Ownership, on the other hand, is not based on the actual, but on the legal relationship of dominance. However, according to Liechtenstein law, a token does not represent a thing and the provisions of property law are only applicable in the course of the implementation of the TVTG analogously or functionally adequate (not functionally equivalent); see BuA 2019/54, p. 126.

39 The foreign object is kept in custody for the owner with the intention of possession; Art 499 (2) and Art 503 (1) first case in conjunction with Art 510 SR; see Besitzanweisung § 375 öABGB in conjunction with § 428 3rd case öABGB (developed by the Austrian Rsp - Besitzanweisung in demarcation to the traditio brevi manu and the Besitzkonstitut). In contrast to the legal definition of the Austrian Civil Code, Liechtenstein, due to its independent property law provisions, provides in a positive way that an object can also be acquired if it remains in the possession of a third party. This is functionally comparable to § 931 deBGB, according to which ownership can be transferred by assignment of the claim for restitution (transfer by assignment).

40 Causa or title for the transfer of ownership is an agreement under the law of obligations between the person who transfers the token and the person who accepts it, whereby the mode is characterized by the actual transfer of the token from the Wallet address of the person who is obliged to transfer it under the agreement under the law of obligations to the Wallet address of the person who is authorized to do so. A fictitious transfer of title by means of an institute of possession is also permissible under Liechtenstein Property Law - cf. Opilio, Arbeitskommentar zum liechtensteinischen Sachenrecht, Volume I, Art 187 SR, Rz 4 (S 406; Art 187 in conjunction with Art 503 SR).

41 In the case of bankruptcy, for example, an action for exculpation can be segregated (Art. 41(2) KO) or, if included in an execution, an action for exculpation can be brought (Art. 20 EO).

42 Unit or species debt.

43 § SECTION 961 OF THE AUSTRIAN CIVIL CODE.

44 Class or profit participation debt. A specified class debt is treated as a unit debt.

45 RIS-Justice RS0012049, "For the question whether a depositum regulare or irregular is present, it does not depend on the mixture of the objects (money) deposited with own objects of the depositary, but on the economic intentions of the parties.

46Parapatits in Schwimann/Kodek