A banner depicting coins of various cryptocurrencies is displayed inside the cryptocurrency mining farm and school at the Ministry of Youth and Sports facility in Caracas, Venezuela, on Thursday, Feb. 22, 2018. Venezuelan President Nicolas Maduro said intended purchases of the country's cryptocurrency, known as the Petro, surpassed $1 billion in two days of sales. Photographer: Carlos Becerra/Bloomberg
Watchdog worry: some companies’ tokens granted investors no guarantees © Bloomberg

Not long ago, lawyers across Asia were devising clever schemes to keep new cryptocurrencies as far from regulators as possible. This year they are trying to come up with ways that make sure crypto offerings fall squarely within securities laws across the region.

So-called initial coin offerings exploded on the start-up scene in 2017 as an alternative to initial public offerings. Unlike IPOs, the market for ICOs has enabled small companies to bypass banks and traditional underwriters of capital raisings by selling digital tokens backed by crypto technologies directly to investors online.

Most ICO issuances have been structured to avoid securities laws. In many cases, the tokens sold by companies did not grant investors rights to share in the profits of the companies, nor did they act as a type of debt that had to be repaid at a certain date. Instead, such instruments often granted access to the company’s products and services.

The technological development has been hailed as a democratisation of fundraising and investment but also quickly attracted scrutiny from regulators around the world, which have accused some companies of issuing securities-like instruments without the proper licensing. Financial watchdogs in Asia have been particularly heavy-handed, with China and Hong Kong all but banning ICO activities.

The solution this year has been to meet the law head-on. Start-ups and their lawyers are exploring ways to make ICOs compliant. They call it a security token offering, or STO. It could become the next big crypto trend in Asia, and around the world, lawyers say — if companies can find a market for them.

“With ICOs, we saw people trying very hard to fall outside of the regulated space,” says Lena Ng, a partner at Clifford Chance, who leads the firm’s financial regulatory practice in Singapore. “STOs are clearly subject to regulation.”

ICO issuance took off in 2017, with companies raising about $7bn through these instruments, up from less than $300m the year before, according to a report in March from PwC, the professional services firm. Issuance hit $19.7bn in 2018 but showed signs of petering out by the end of the year as regulatory hurdles and overall sentiment for cryptocurrencies waned.

Still, the coins have been hit with big regulatory problems in Asia. Last year a company called Black Cell Technology was forced by the Securities and Futures Commission in Hong Kong to “unwind” an ICO sale after the watchdog said the instruments resembled securities.

Start-ups have gone to some lengths to avoid such infractions by setting up their businesses in offshore jurisdictions. One Hong Kong-based company last year first moved its official company domain to the Indian Ocean island of Mauritius. It then sold a token from a limited liability company in the Cayman Islands, which was in turn wholly owned by a trust in the island-nation of St Kitts and Nevis.

However, such elaborate means of avoiding regulatory scrutiny have since gone out of style in the legal sector, Ms Ng says. Inquiries about STOs have surged this year, she adds, indicating that the future of cryptocurrencies is more likely to play out in regulatory daylight.

The catch is that issuing a regulated security is a costly endeavour.

“Is there a business case for securitising these assets?” asks Hoi Tak Leung, a technology specialist and counsel at Ashurst’s corporate practice in Hong Kong. “There’s a cost to that, and the cost to comply can be quite high.”

One of the merits of STOs is that they transfer legally binding rights in a company or an asset to the investor. With many ICOs it is unclear what, if anything, the buyer is taking possession of.

However, as with traditional IPOs, complying with disclosures for public securities is a complex process that can take months and often requires a large, expensive legal team. Such high barriers will greatly reduce the appeal of STOs for small start-ups looking for cheap means of raising funds, Mr Leung says.

Enthusiasm for regulated STOs, nonetheless, is building, as the PwC report shows. Companies raised $442m with STOs globally last year, up from just $22m the year before.

Some of that demand is probably coming from institutional investors, says Etelka Bogardi, a financial services regulatory partner at Norton Rose Fulbright in Hong Kong.

Under most current regulatory frameworks in Asia, STOs will be marketable only to institutional investors such as hedge funds and family offices. In many ways, the future of STOs looks more like a private placement to a small number of professional investors, rather than the broad base of global retail investors originally intended.

For many companies, abiding by securities laws will defeat the purpose of raising money through crypto technologies. “At the end of the day, there is a balance to be struck,” says Ms Bogardi. “These things were clearly a form of capital raising, and when things go wrong people look to the regulators.”

She adds: “It’s moving towards a market for hedge funds and investors who are in the know, and moving away from the democratisation of investing.”

The tables below rank law firms and in-house legal teams for the FT Innovative Lawyers Apac awards.

Enabling Business Growth and Transformation:

Rank Law firm Description Originality Leadership Impact Total
STANDOUT Shardul Amarchand Mangaldas & Co Following the implementation of a new Indian bankruptcy code in 2016, the firm represented AION Investments Private II and JSW Steel in their acquisition of 75 per cent of Monnet Ispat & Energy. Provisions included in the plan absolve AION from outstanding liabilities and were upheld by the Supreme Court, creating a framework for how to treat liabilities in unresolved cases of corporate insolvency. 8 8 7 23
HIGHLY COMMENDED Pinsent Masons Assisted ANZ Bank to develop a creative tripartite agreement transferring credit risk from operators to state governments in Australia. The procurement of assets at a lower price for governments retains long-term tax benefits, and is replicable across jurisdictions with institutional banks. 8 7 7 22
HIGHLY COMMENDED Allens Advised on commercial real estate company Unibail-Rodamco's $24.7bn acquisition of shopping centre operator Westfield Corporation. The acquisition was the first listing of a French entity on the Australian Stock Exchange and the first use of Australian schemes of arrangement to transfer securities in foreign entities. 7 7 7 21
HIGHLY COMMENDED Freshfields Bruckhaus Deringer Represented Anta, China's largest sportswear brand by revenue, in its acquisition of Finnish sporting goods company Amer Sports. The deal provides a framework for Chinese investors to enter Europe in a period when large, private sector cross-border acquisitions are proving challenging. 6 8 7 21
HIGHLY COMMENDED Norton Rose Fulbright The firm developed a new insurance product in the US that mitigates energy production risk. It adapted the product to the Australian market, enabling its clients, Allianz Global Corporate, Specialty and Nephila Climate, to fund Lal Lal Wind Farm, a renewable energy project. The successful close of Lal Lal makes investment into renewable energy more bankable and facilitates the production of lower-cost renewables. 7 7 7 21
HIGHLY COMMENDED Paul Hastings Helped investment fund manager CDH acquire Australia-based medical device company Sirtex Medical. The firm secured last-minute financing from Bank of China and midsized Chinese banks to structure an attractive joint offer with partners China Grand Pharmaceutical and Healthcase Holdings, which gives Sirtex access to the Chinese healthcare market. 6 8 7 21
HIGHLY COMMENDED White & Case Advised on negotiations between French renewable energy company Neoen, Australian agribusiness Nectar Farms, the government of Victoria and commercial banks to secure government support and to attract financing for the Bulgana Green Power Hub. The firm structured two offtake agreements, including a power purchase agreement with Nectar Farms and an electricity hedge with the state government. 7 7 7 21
COMMENDED Ashurst Acted for Indonesia Asahan Aluminium (Inalum), the state-owned mining company, in its acquisition of a 51 per cent stake in the Grasberg mine from Rio Tinto and Freeport-McMoRan. The acquisition of the controlling interest of the world's largest gold mine and second largest copper mine is a milestone in Indonesia's efforts to nationalise its natural resources.  6 7 7 20
COMMENDED Herbert Smith Freehills Facilitated Anglo-Australian miner Rio Tinto’s sale of its $3.5bn interest in Grasberg, Indonesia’s largest mine. The negotiations were politically charged as the Indonesian government purchased the majority interest in the mine from Freeport-McMoRan. The firm secured a significant valuation for Rio Tinto shareholders and a clean exit, reducing ongoing liabilities despite unclear regulations.   6 7 7 20
COMMENDED LNT & Partners After previous failed attempts, the firm developed a structure that insulated its client, a foreign investor, from direct investment restrictions while allowing it to receive the benefits of local status. The firm’s structure supports free trade and cross-border investments in Vietnam for industries such as logistics where foreign investment is restricted. 6 7 7 20
COMMENDED Morrison & Foerster Advised Chubb on its joint venture with Grab, a leading ride-hailing platform in south-east Asia. The joint venture enables Chubb to market and sell its insurance products through Grab’s platform to drivers and customers. 7 6 7 20
COMMENDED Rajah & Tann  Acted for stapled trust, Viva Industrial Trust, on its merger with ESR-Reit using a trust scheme of arrangement. The merger between a stapled trust and a Reit by way of a trust scheme was a first for Singapore. 6 7 7 20
COMMENDED Atsumi & Sakai Technically interpreted government rules concerning data sharing through banking application programming interfaces in order to create an agreement template for using APIs in Japan. The firm collaborated with a wide range of market participants to ensure business needs were covered across the board. 7 6 6 19
COMMENDED Mayer Brown Advised Bank of China in its provision of $850m in syndicated loans, where credit is provided by more than one lender, to the buyers of Sirtex Medical, a provider of radiation therapy. The firm structured a transaction and pre-payment mechanism that ensured the project was bankable despite numerous complications such as an ongoing class action lawsuit by minority shareholders seeking to block the deal.   6 7 6 19
COMMENDED Ropes & Gray Designed the governance structure for a joint venture between Alibaba Group and Switzerland-based luxury goods company Richemont. Accounting for cross-platform data and privacy protection for Alibaba’s customers while navigating the legal structure of mainland China, the firm negotiated deal terms that enable each party to bring the retail offerings of Richemont to Chinese consumers. 6 7 6 19
COMMENDED Ropes & Gray Advised Bain Capital on its simultaneous acquisition of US-based packaging company World Wide Packaging and a leading Chinese cosmetics packaging manufacturer. The two transactions were the first step in Bain Capital’s plan to merge the two companies. The new entity is expected to provide packaging solutions to beauty brands around the globe. 6 7 6 19
COMMENDED S&R Associates Implemented a pooled debt arrangement for ArcelorMittal’s $5.7bn bid for Essar Steel. The takeover proposal for the indebted steelmaker was recently approved by the National Company Law Tribunal, a quasi-judicial body in India, and sets a standard for insolvency processes in India. 6 7 6 19
COMMENDED Slaughter and May Under the chain principle of the Hong Kong takeovers code, companies that acquire a controlling interest in a target must make an offer to the remaining shareholders to purchase their shares. The firm advised two Lai Sun Group subsidiaries on an offer for eSun Holdings as well as the mandatory chain principle offer for Lai Fung Holdings. The transaction is a rare example of an offer for a Hong Kong-listed company triggering an offer for another Hong Kong-listed company. 6 7 6 19
COMMENDED Slaughter and May Acted for the Hong Kong Association of Banks to find a resolution for a client caught between compliance with competition law and bank regulatory obligations in Hong Kong. 6 7 6 19
COMMENDED Allen & Gledhill Advised on regulation to ensure compliance for a healthcare start-up, ensuring that the platform's design was consistent with medical regulatory, data protection and other relevant areas of law in all jurisdictions. 6 6 6 18
COMMENDED Gilbert + Tobin Xinja is a digital-only "neobank" that aims to provide transparent banking services. The firm supported Xinja in securing its restricted ADI licence required to accept deposits, the second neobank in Australia to be secured, which allows Xinja to perform limited banking services in Australia. 6 6 6 18
COMMENDED Mori Hamada & Matsumoto Advised bitcoin wallet and exchange service Coincheck on its acquisition by commercial foreign exchange Monex, following Coincheck's hack in early 2018. The acquisition helped Coincheck regain approval from Japan's Financial Services Agency, and allowed Monex to move into the cryptocurrency market without setting up its own exchange. 6 6 6 18
COMMENDED Shardul Amarchand Mangaldas & Co Acted as lead counsel in India for retailer Walmart on its $16bn acquisition of a majority shareholding in Flipkart, the e-commerce site. The firm structured several tax treaty provisions, ensured compliance with India’s strict commerce laws and defended the retailer against attempted injunctions. The transaction makes Walmart the second foreign e-commerce company to enter the Indian market after Amazon, and the first to do so by acquisition. 6 6 6 18

Enabling Business Growth and Transformation (In-house):

Rank Company RSG Description Originality Leadership Impact Total
STANDOUT Xero Helped the business consolidate into a single listing on the Australian Securities Exchange from both the ASX and the New Zealand Exchange, enabling Xero to become a top 100 listed company in Australia. The team worked with regulators to show that certain reporting provisions were unreasonable for a company of Xero's size, significantly decreasing reporting requirements. 7 8 8 23
HIGHLY COMMENDED Turner Created a new licensing agreement to facilitate media group Turner's partnership with cruise management company Oceanic Group, creating the first-ever Cartoon Network branded cruise ship. In constructing the agreement the legal team offset risks by building in provisions to protect the company's intellectual property. The agreement serves as a template for other location-based entertainment projects. 7 8 7 22
COMMENDED Go-Jek The team worked with other departments to simplify and streamline the merchant onboarding process for Go-Pay, the ride-hailer's payment platform, which processes payments for more than 300,000 micro and small and medium-sized enterprises. 7 7 7 21
COMMENDED Turner Restructured procedure for partnerships with external service providers to better manage enforcement of online content removal requests in line with anti-piracy claims for the media group's licensing and merchandising business in China. The new approach resulted in significant savings for the company as well as a more than 50 per cent cut in response time for takedown requests. 6 7 7 20
COMMENDED Uber Helped design a new business model for the ride-hailing company following changes to Taiwanese regulations in 2017 that resulted in the company facing significant fines, approximately $800,000 per driver, and leading to its temporary exit from the market. The new model relies on partnerships with licensed car rental companies, enabling Uber to operate within the strict regulatory environment. 7 7 6 20
COMMENDED Marriott International Building on their 2017 joint venture with Alibaba, which allows customers to book rooms through the Alibaba platform and use Alipay to reclaim sales taxes, the team expanded the partnership to include Fliggy, a travel company under the Alibaba Group. To facilitate a facial-recognition hotel check-in technology pilot in China, the team worked to ensure compliance with personal data legislation. 6 7 6 19

Explore the Innovative Lawyers Asia-Pacific rankings 2019


  • FT Most Innovative Law Firms
  • Rule of Law and Access to Justice
  • Most Innovative In-house legal teams
  • Collaboration

Business of Law

  • Data, Knowledge and Intelligence
  • Managing and Developing Talent
  • Innovation in Diversity and Inclusion
  • New Business and Service Delivery Models
  • New Products and Services
  • Strategy and Changing Behaviours
  • Technology

Legal Expertise

  • Accessing New Markets and Capital
  • Enabling Business Growth and Transformation
  • Managing Complexity and Scale
  • Litigation and Disputes
  • Creating a New Standard
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