In the midst of redefining objectives and structures to take advantage of our early success, and with the
intention of helping our potential Token holders understand the benefits of our Tokens and in turn the
support and legal arguments that exist behind our decisions, is that we asked for a legal opinion about our
Tokens and their characteristics, as well as the perception of these related to the crypto-market. As a
result, we count with two Legal Opinions referring to our BHF-Token and our BHM-Token, in which the
characteristics of each of them were captured and specified.
Regarding our BHF-Token, this is a brief summary of what the Legal Opinion assures us:
● BHF-Token’s utility
Granting access to the future peer to peer Blue Hill Platform (Blue Hill Platform is “a peer to peer service connecting certified mine companies, smelters, logistic companies, banks and multinational companies allowing to lock up orders as well as transparent and direct trading and certifying its origins”) and tracing the origins of all the resources on the Blue Hill Platform.
● BHF-Token categorization
In accordance with the provided explanation BHF - Token corresponds to the Utility Token description provided in Swiss FINMA Extended Guidelines. Its purpose is to provide digital access to the application in the form of Blue Hill Platform and to enable tracing of the origin of the goods and resources. At the same time it is noted that BHF - Token will only be issued after the Blue Hill Platform is ready, thus fulfilling the requirement of the Swiss FINMA for the utility token to be immediately usable for its main purposes at the point of issue.
● Preparation time
One of the qualities especially contributing to the Utility tokens attractiveness is the relatively easy and fast emission process. Particularly when existing blockchain such as Ethereum is used.
● Utility Tokens Market
Utility tokens have given a rise to the entire industry with numerous trading platforms and wallets available all around the world and used by hundreds of thousands of users. Thus being essentially unregulated, utility tokens may almost instantly enjoy all the benefits of being traded on a variety of crypto exchanges in different jurisdictions, including high volume markets for the crypto industry such as Binance or MXC.
● Summary about the BHF-Token:
It is a Utility token in accordance with Swiss FINMA definition provided in the Extended Guidelines, which has functionalities within the Blue Hill Platform, in which you can access its services only through the possession of BHF-Tokens. This platform will be the space for their emission and distribution, as well as a place of connection between small and medium-sized companies in the mining industry, including banks, smelters, mining companies, and other participants in the chain. This will make the industry and the market interested in BHF-Tokens, given their usefulness of access and participation in the Blue Hill Platform.
Also Utility tokens, being essentially unregulated, demonstrate much higher liquidity and tradability rather than security tokens as well as require substantially less time and resources for their issuance.
Regarding our BHM-Token, this is a brief summary of what the Legal Opinion assures us:
“Regardless whether BHM-Token to be considered Utility or Asset token, Blue Hill Mining as a token issuer can comply with Swiss AMLA by engaging financial intermediary for the due-diligence and funds acceptance purpose without applying for licensing with Swiss FINMA.”
● BHM-Token categorization
BHM-Token intended to represent a co-ownership of the Blue Hill Mining and to be linked to the shares of the Blue Hill Mining in the way that 1 BHM-Token equals to 5 shares of Blue Hill Mining and planned to be offered via the Blue Hill Platform. In the BHM Lightpaper BHM-Token referred to as security token.
● Preparation time
The regulatory requirements for the security tokens are substantially more stringent than that for the utility ones. In general for the issue of a given Security token such as BHM-Token will require a considerable preparation in order to comply with all above mentioned Swiss regulatory requirements, which are still incomprehensive and may lead to undesirable delays. Hence, in that regard, regulated tokens have been substantially more difficult to manage for projects.
● Security Tokens Market
It can be observed that security tokens are currently suffering from a lack of market place, which strongly affects their liquidity and thus tradability. This is partially due to the fact that the security token market has been struggling to deal with securities legislation as well as regulatory uncertainty and the issues around the transferability of securities on the blockchain.
Given the results of instant research, it should be noted that unregulated tokens which are not subject to securities legislation, have benefited from a lack of trading restrictions compared to security tokens. However in the long run with clarification of regulatory framework in different jurisdictions including Switzerland regulated security tokens tradability may significantly accelerate thus increasing security tokens liquidity.
● Summary about the BHM-Token:
Based on the available information and legal analyses it is concluded that:
- BHM-Token shall be classified as the Asset token based on its description in the BHM Lightpaper and in accordance with Swiss FINMA definition
- BHM-Token emission shall require an official and approved Prospectus (exceptions may apply)
- Given the results of detailed and comprehensive analysis it might be considered that Switzerland is one of the most developed and progressive jurisdictions for the potential BHM - Token STO. Although, it should be noted that substantial time and resources may be required and should be considered before initiation of security token offering
Check the full Legal Opinions here: BHM-token and BHF-Token, or check the links in our website’s footer