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Crypto Law/Level VI · Market conduct/6.3 The honest launch/Lesson 7

A launch checklist

A structured pass through the legal questions a token launch raises, from structure and sanctions to contract powers, distribution, words and conduct after launch, with pointers to the lessons that cover each.

Education, not legal, tax or investment advice. Crypto law differs between countries and states and changes often. Check the current rules where you live with a qualified lawyer or tax adviser before you act.

The lean path

The cheapest, lowest-tax, simplest and most private route the law allows, best first. Each step names the rule it rests on and the condition that keeps it lawful.

  1. The cheapest launch-wide safeguard: before deployment, have an outsider verify every public claim using only your published materials, and fix or cut whatever cannot be verified. It costs only time and catches the half-truths behind most fraud cases.
  2. Screen counterparties against OFAC’s free sanctions list and consider geolocation and IP blocking, as OFAC’s 15 October 2021 guidance suggests. Catch: civil sanctions penalties generally rest on strict liability, so not knowing is no defence.
  3. Remove unneeded contract powers, verify source code and publish the address map before buyers arrive, each costing a transaction fee or nothing. Catch: changes made after buyers arrive are the ones most likely to be called a rug.
  4. In the EU, a free offer avoids MiCA Title II; offers under €1,000,000 over 12 months, to fewer than 150 persons per Member State, or only to qualified investors skip the white paper (Article 4). Catch: marketing rules still apply.
  5. Keep records of every allocation, sale, fee change and announcement from day one; regulators, courts and the IRS will ask, and creators and insiders owe US tax on token income. A spreadsheet suffices; hire a professional once sums are material.

MaterialsThe launch’s own documents: contract addresses, allocation table, wallet register and every public statementOFAC’s Sanctions Compliance Guidance for the Virtual Currency Industry (October 2021)Lessons 5.1.1 to 5.1.7 and 6.3.1 to 6.3.6A list of the countries whose users the launch will reach

Wonder

  1. Is there one list that makes a launch legal everywhere?
  2. Which items have to be settled before the contract is deployed?
  3. What still matters after launch day?

Explore

  1. No checklist makes a launch lawful; the law depends on the facts, the token’s design and the countries reached, and the answers change as rules are made. What a checklist does is make sure each question is asked before it becomes expensive. This one runs in the order a launch happens: structure, money rules and sanctions; contract powers; distribution; words; conduct; and after launch. Each step points to the lesson that explains it. The test throughout is the one from lesson 6.3.1: every public claim should be true, complete enough not to mislead, and provable from evidence that buyers can see.
  2. Structure, money and sanctions come first. Decide who legally launches and owns the treasury (lessons 5.3.4 and 5.3.7). Check whether any part of the design accepts value from users and transmits it, which can be money transmission under US federal and state law (lessons 5.2.1 and 5.2.2). OFAC’s guidance of 15 October 2021 says sanctions obligations apply equally to virtual currency and fiat transactions, that civil penalties generally rest on strict liability, and that firms with strong programmes should be able to use geolocation tools and IP-address blocking. Sanctions screening is covered in lesson 5.2.5.
  3. Next comes the contract. List every power over the token and its pool, including mint, freeze, upgrade, fees, pausing and blacklisting, and decide which to remove and which to keep behind a multisig or timelock (lessons 5.1.5 and 6.3.2). Describe each fee, its rate and maximum, who receives it and who can change it (lesson 5.1.6). Decide whether burns will happen and how they will be shown (lesson 6.3.5). Publish verified source code where the chain allows it, and decide where the official addresses will live (lesson 6.3.3). Changes made after buyers arrive are the ones most likely to be called a rug (lesson 6.2.1).
  4. Distribution is where most launches are judged. Choose between a presale and a fair launch knowing what each implies for US securities law (lesson 5.1.1). Fix the team, adviser and promoter allocations, their vesting and lockups, and how each is enforced (lessons 5.1.2 and 5.3.3). Make sure no insider, bot or bundled wallet takes supply that the launch’s description says is open to everyone (lesson 6.2.4). In the EU, check whether an offer needs a MiCA white paper or fits an exemption (lesson 3.3.1); the nearest US counterpart is the SEC’s proposed Regulation Crypto Assets, with comments due by 20 October 2026, still a proposal.
  5. Words come next. Read every statement for promises of returns, price targets, listings and roadmaps, which can create an investment contract in the US (lesson 5.1.3), and for checkable claims such as ‘audited’, ‘locked’ or ‘fair’, which consumer-protection and fraud law test against the facts (lesson 5.1.7). Paid endorsements need disclosure (lesson 5.3.1). In the UK, promotions to consumers have their own regime with criminal penalties, and in the EU, MiCA Article 7 governs marketing. Conduct follows: check for wash trading, coordinated buying and market-making arrangements that manufacture volume (lessons 6.1.1 to 6.1.7).
  6. Launch day is the start, not the end. Follow the channel plan in lesson 6.3.6, publish news to everyone at the same time, and update or withdraw statements that stop being true. Keep records of every allocation, sale, fee change and announcement; regulators, courts and tax authorities will ask for them, and US tax applies to creators and insiders as well as buyers (lessons 2.2.4 and 2.3.7). A practical check: before deployment, have someone outside the team try to verify every public claim using only the launch’s own published materials, and treat each claim they cannot verify as unfinished.

Key facts

  • OFAC published its Sanctions Compliance Guidance for the Virtual Currency Industry on 15 October 2021.
  • The guidance states that OFAC sanctions compliance obligations apply equally to transactions in virtual currencies and in traditional fiat currencies.
  • According to the guidance, OFAC may impose civil penalties for sanctions violations generally based on a strict liability standard.
  • OFAC’s guidance says virtual currency companies with strong sanctions compliance programmes should be able to use geolocation tools and IP-address blocking.
  • Comments on the SEC’s proposed Regulation Crypto Assets are due by 20 October 2026, and the rules are not yet in force.
  • MiCA Article 6(5) requires a white paper to state that the crypto-asset may lose its value in part or in full, may not always be transferable and may not be liquid.

Exercise nine, six, three, one

9CollectList up to 9 decisions still open in a launch you know or are planning (some lists are shorter), such as who owns the treasury, which powers stay, how team tokens vest, or which countries are served.
6ClusterSort them into 6 categories: structure and ownership, money and sanctions rules, contract powers, distribution, public statements, and conduct after launch.
3DistillReduce the 6 categories to 3 groups: decisions that must be made before deployment, decisions that must be made before the first public statement, and decisions that can wait until after launch.
1CrystallizeWrite 1 sentence naming the single open decision on your list that would be hardest to reverse once buyers arrive.

Fact check

Dates, figures and claims checked against the published sources listed below.

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