If you are interested in listing a digital asset or crypto token (a “Token Listing”) with Wyre, we want to talk to you!
Our business development and legal teams have provided the following information as a guide to prepare you for what’s ahead. As every token issuer’s situation is unique concerning their digital assets, the chain, the offering, the type of purchaser, and other factors, Wyre generally requires information from a developer before we can list the token on the Wyre platform.
We’re providing this information as an introduction and for general purposes. It is not intended to provide you with legal advice. We encourage you to obtain the advice of your own legal counsel for your set of objectives.This information should not be relied upon to determine whether or not a Token Listing with Wyre is suitable for your unique needs or circumstances. Let’s get started!
Digital assets increasingly are scrutinized by regulators who help protect the public from fraud and financial loss. As a result, your token or digital asset may fall into one or more categories that conform to certain regulations or require a registration as an investment product, a security offering, initial coin offering (ICO), or “first day” listing.
While this summary will not attempt to go into the fine details, some activities and attributes of your digital asset such as how an asset is built and coded, wrapped, or how it functions in the crypto-economy, will usually require further review from the Wyre team.
As in these examples, if one or more of the following statements are true for your asset, our team may need to do a deeper dive to see if your token is appropriate to list on the Wyre platform:
- Has the digital asset developer or issuer made claims about the asset being an investment or a security, or that users or holders will see a rise in price or return on investment in the asset?
- Were the Initial tokens distributed in a sales or offering event to users (in exchange for fiat or other crypto)?
- Does the platform associated with the asset lack a real or supportable use?
- Was the asset distributed prior to being usable for its intended or stated purpose?
- Has the developer or issuer’s application included information on UBOs (Ultimate Beneficial Owners), executives, or key individuals associated with the project?
- Is the information on sources and fundraising methods in the application limited or conflicting?
- Does the project have a close association with Wyre’s prohibited categories of businesses?
Many assets implement privileged roles that have the ability to unilaterally take administrative actions, such as arbitrarily changing network functionality or seizing user funds. If misused, many of these privileges threaten Wyre’s ability to safely facilitate transactions using customers’ assets, lowering the likelihood that Wyre would list the token.
Wyre prefers to see asset issuers follow the principle of “least privilege,” where privileged roles are scoped as narrowly as possible to the minimum required functionality. This includes situations where asset issuers renounce privileges that are no longer critical. In cases where these privileges cannot be eliminated, we prefer that asset issuers provide detailed policies and procedures for quorum-based key management and use, especially for actions that impact user balances. Ideally, keys would be held by a qualified custodian that can certify that the quorum is met before the role is able to take action.
In examining the degree of centralization or novel use, issuers should be prepared to discuss the following areas:
The network has centrally controlled nodes or validators that can collude to influence the state of the blockchain. A central team is in control of enabling or maintaining the platform’s functionality or code, with few to no contributions from unaffiliated third-party developers.
The keys necessary to perform privileged actions like pausing transactions, modifying token balances, or completely changing the token’s logic are controlled by a single individual or held in a single system.
The issuer’s core team owns a significant percentage of the asset which can be used in community governance to force a vote decision. Similarly, too much of the asset share controlled by one party in a proof-of-stake blockchain will increase the risk of that party tampering with mined blocks. This could result in censorship or double spending.
The source code is private or, for Ethereum projects, not verifiable through Etherscan. Without access to source code, an auditor or security engineer cannot easily analyze the token’s behavior, precluding high-confidence reviews and causing significant delays.
The asset never received a security audit from a reputable auditing firm, especially if the code is complex or novel.
The source code does not use industry standards. Whenever possible, favor well-vetted standards such as OpenZeppelin’s vast repository of smart contracts. If implementing a special feature, such as off-chain signing or transaction hooks, use EIPs as guidance.
We hope this guide makes it easier for asset issuers and their teams to navigate the requirements and start the listing process. Complete, correct, and well-documented applications are more likely to receive a prompt review.
As always, we can’t wait to list compliant digital assets on Wyre and to see all the ways you’re driving the crypto economy forward.
The analysis concerning whether a digital asset is appropriate for listing may evolve over time, as the nature of digital assets, applicable precedent, and SEC statements and interpretations change and evolve. Each member of the community is encouraged to seek legal advice from its own attorneys to obtain legal guidance on these subjects. Neither Wyre Payments, Inc. nor its respective affiliates, directors, officers, employees, security holders, agents and attorneys, are acting in the capacity of attorneys for a particular project team.
If you are interested in listing your digital asset with Wyre, please reach out here.
Updated 6 months ago