MemeCoins – Legal Assistance

$BISON, the memecoin with the funniest bison picture

Let’s imagine that a meme involving an amusing bison emerges. A group of individuals decides to benefit from that popular trend and launch meme coin making use of the meme’s picture. The BISON memecoin is born.

It’s really just to have fun, the team isn’t even trying to make money from it. The coin is a basic BSC (Binance Smart Chain) token that does absolutely nothing special and isn’t listed on any big exchanges.

What can happen, would be that the residency country of one of the team members decides to investigate the coin. Due to a few specific details, the financial authority of the country judges that this good-hearted memecoin is actually a security, a regulated financial asset. The friends who launched the token are now guilty of issuing an unregulated asset onto the market without declaring it to the authorities nor complying with the rules on such assets. The consequences can range between hefty times and imprisonment.

The smart thing to do to prevent such a situation is simply for the BISON team to request a set of legal documents crafted by LegalBison’s FinTech lawyers. One of these documents would demonstrate that the token is, according to the law, a payment token (and if not, assist the team in turning it into one). Another document would cover the terms of the token sale, providing a reassuring frame to the clients and protection to the stakeholders.

These documents are one of many legal services that LegalBison provides to crypto projects and FinTech companies.

$NOSIB, a meme coin that requires a legal structure

An absolutely hilarious meme just emerged: it’s a drawing of a bison upside down. People are joking about a “nosib” and the neologism catches on. It’s time to launch meme coin out of it.

Two friends decide to create a website and gather a community to launch an exciting new token: $NOSIB. This is a basic payment token, as LegalBison’s lawyers confirmed in the form of a legal opinion. However, the two friends behind the project want to give more substance to their idea and to safeguard themselves from potential liabilities, for good measure.

With the assistance of a senior consultant at LegalBison, the NOSIB duo is provided with a turnkey company registration service in a convenient jurisdiction. This legal entity becomes the official owner of the memecoin project and can now contract as such. The two entrepreneurs’ liability is no longer at stake. The creation of a legal entity is also a significant boost in confidence for the NOSIB community, as it gives an official body and a registered address to the whole operation.

$BUYSON, the political memecoin in need of a crypto license

Political-themed memecoins are becoming increasingly trendy. They are a way to speculate on the political sentiment and not just on market sentiment about economic tendencies.

Let’s imagine a parallel world where a third party and candidate are allowed to run for the presidency in the United States of America. This candidate would be the popular crypto advocate Marilyn Buyson. As a tribute (or a way to capitalize on her popularity), a group of political crypto activists launches the BUYSON memecoin, with a drawing of the presidential candidate’s face as a symbol.

The project of the political crypto activists also has a specific goal: raising funds to donate to the campaign of Mrs Buyson. After all, she promised to make Bitcoin legal tender in the USA. The idea is then to sell BUYSON coins initially for USD, as Bitcoin is not (yet) an official currency of the country and the donation will be sent to the candidate’s party in dollars.

In order for the team to proceed, they eventually require a payment gateway for processing transactions and a bank account to collect the cash payments. And as long as they do not register a company and secure a crypto license, no payment service provider and no banking institutions will accept them as their client. Subsequently, getting a crypto license becomes a mandatory step for their operation. And by calling LegalBison, our legal team won’t just provide assistance in structuring a company and getting a crypto license, but also in opening the necessary bank and payment processing accounts.

Memecoin Issuance without a Legal Entity - What could go wrong?

As covered in the three above examples, various levels of legal assistance are provided for various cases and natures of projects. We were able to design these simple stories based on the experience of our clients, on our own work, and on the publicly disclosed lawsuits against projects failing to comply with the law and ending up in major trouble. As the public is more and more paying attention and investing in cryptocurrencies, the regulatory side is catching up and raising the bar slowly to the same level as financial institutions. Though there is an old, unresolved debate about the legal nature of cryptocurrencies, some of them have already fallen into the categorization of financial assets.

Therefore, improper launch of a meme coin could result in severe legal repercussions. It is entirely possible to breach the law without any willingness for malevolence. Preparation, education, and anticipation are keys. The sanctions can range from important fines to imprisonment, as the personal liability of the project members can be engaged by the prosecutor.

LegalBison can clear out the legal risks by first acknowledging and assessing your memecoin project, and second by making suggestions and advising on how to properly set it up and have it running safely. Our legal team also takes care of any required addition to your project’s legal structure, in a turnkey fashion.