ICO - Initial Coin Offering

A token crowdsale is a way for companies to raise funds from the interested investors, that are later used for developing new products. The tokens are a cryptocurrency traded on decentralised platforms using the smart contracts technology.

AnsonBaer is experienced in drafting the legal documents such as the Terms & Conditions and Privacy Policy for Cryptocurrency ICO and we give advice on regulatory and general legal issues. AnsonBaer and its partners have strong IT/IP Law, Corporate Law, Banking and Finance Law and Tax Law practices that combine perfectly to deliver legal advice in fin-tech projects, both in Estonia and cross-border.

ICO and Estonian company

Estonia is quite liberal on Crypto currencies and many project find their way here. We have consulted several ICO project and have substancial know how. Still, you should have to consider some key issues, before you choose Estonia as your place for ICO.

Every ICO is unique and should planned individually. We are prepared to offer you with reasonable costs, a preliminary legal opinion, on your ICO to avoid additional future costs. The legal opinion will be based on your White paper/Business plan. We can also help you with Terms and Conditions, Cookie and Privacy policy.

The Estonian Finacial Superrvising Authority (FSA) has given following guidelines. In case the token will give voting and participating right in profit sharing, the token will be considered as security – a security token. Issuing a security token means, that the same obligations arise for issuer, as on IPO. The IPO prospect must be registered and approved by Estonian Financial Supervision Authority (FSA).

The full opinion of FSA can be read below *


Estonian company can apply for two possible crypto-currency related operating licences.

  1. Cryptocurrency exchange licence

The licence gives to the provider a right of exchanging a crypto currency against a fiat currency.

  1. Cryptocurrency wallet licence

The licence gives to the provider a right to offer to its clients a crypto currency wallet service

The licences are issued by Estonian Financial Intelligence Unit (FIU), a department of Estonian Police and Border Guard Board. The licences can be applied separately or together.


Requirements for application

For successful application of the licence, the company must present the following documentation:

– Detailed information about the company officers, shareholders and UBO-s and additionaly certificate of clean criminal record of all persons mentioned.

– Passport copies of all above mentioned persons

– AML procedures

– Internal audit procedures

– procedures of following International Sanctions Law


*The documents must be in Estonian, English or Russian. Documents in other languages must be translated to Estonian.

* Documents can´t be older than 3 months

* The international documents must be notarized and apostille´d or legalized.

* The officials may ask additional information

* In case you will use a corporate shareholder the information on related parties must be provided


The client shall provide all the information about the officers of the company and Anson/Baer will prepare all other documentation including procedures. We also will assist you during the application process, if any additional questions arise. The processing time is usually one month.



– The licenced company has an obligation to supervise the activities of its clients and report suspiciuos activities

– There are no special reporting to Estonian Tax Board

– FIU is in right to make inquiries about the activities of the company and supervise the compliance activities


* FSA: The legal framework of initial coin offering in Estonia

Recently, an increased attention has been drawn to developers, businesses and individuals using cryptocurrency offerings, such as initial coin offerings (ICO) to raise capital. The structures of ICOs vary and they may be used to raise capital for different kinds of projects.

Cryptocurrency offerings can provide new opportunities for businesses to raise capital and for investors to access a broader range of investments. However, numerous questions have arisen about the legal framework to the offerings.

The Estonian Financial Supervisory Authority (EFSA) is of opinion that tokens in terms of the offerings mentioned above, depending on their structure, might be considered as securities according to the definition set forth in the current Securities Market Act (SMA) as well as in the Law of Obligations Act (LOA). In assessing whether or not securities laws apply, the EFSA states that substance should be considered over form.

Every ICO is unique and should be assessed on its own characteristics. The EFSA explains that tokens which give investors certain rights in the issuer company or whose value is tied to the future profits or success of a business are likely to be considered securities in the meaning of § 2 of the SMA. Therefore, the offering of such tokens may constitute as the issue of securities and, depending on its exact nature, be governed by the rules that of public offering as prescribed in § 12 of the SMA. That being the case, it is required to register a respective prospectus in the EFSA.

As regards to ICOs encompassing the offering of instruments qualified as securities, it is important to note that the entities facilitating such ICOs or secondary trading of such tokens may be considered as providing investment services as stipulated in § 43 of the SMA. In particular, by organising such an offer or issuing tokens or bringing together the interests for acquisition and transfer of tokens under uniform conditions. The abovementioned services may be provided as a permanent activity only by authorised entities.

The EFSA notes that ICOs may also be governed by the Credit Institutions Act (CIA). This might be in the case where the main activity of the business is to provide loans on its own name and account and such activity is being financed through the repayable funds received from the public in the form of an ICO.

Regarding trading cryptocurrencies, it is important to mark that according to the judgement of the Estonian Supreme Court RKHKo 3-3-1-75-15 (available in Estonian), trading Bitcoins as business activity corresponds to the provision of services of alternative means of payment. This means that persons trading with virtual currencies in the course of their business activities may be considered to offer virtual currency services as provided in the Money Laundering and Terrorist Financing Prevention Act (MLTFPA) § 2 (1) points 10 and 11. Conclusively, the respective persons should apply for authorisation pursuant to MLTFPA § 70 (1) point 4 or 5.

To conclude with, the EFSA states that although a new technology is involved, and what is being sold is referred to as a token instead of a share or equity, a token may still qualify as a security as set forth in the Estonian legislation. Businesses should complete an analysis on whether a security is involved. Professional advice may be useful in making this determination.