Legal Framework (incl. MiCA, VARA, Ukraine)
EU Regulation (MiCA)
The Markets in Crypto-Assets Regulation (MiCA) — Regulation (EU) 2023/1114 of May 31, 2023 — establishes, for the first time, a harmonized EU-wide legal framework for crypto-assets. MiCA applies to all crypto-assets that do not already fall under existing financial market legislation (such as MiFID II), particularly utility tokens, asset-referenced tokens (ART), and e-money tokens (EMT). For utility tokens like SCANDIC COIN, MiCA requires that a crypto-asset whitepaper be prepared and published, containing specific mandatory information (e.g., issuer details, tokenomics, risks). Unlike a securities prospectus, a MiCA whitepaper does not require prior approval by a supervisory authority and offers greater flexibility in format — its main purpose is transparency toward the public. SCANDIC COIN fulfills these requirements with this whitepaper, which includes all relevant disclosures in accordance with Article 6 of MiCA.
An important feature of MiCA is its extraterritorial effect. In principle, providers from third countries (outside the EU) may also offer crypto services to EU customers — but only when these services are provided at the customer’s initiative (the so-called “reverse solicitation”). Article 61 MiCA clarifies that no license from an EU Member State is required if a service provider from abroad does not actively solicit EU customers but rather enters into relationships solely at the initiative of the customer. This reverse-solicitation exemption is significant for the SCANDIC GROUP, since its operational entity is based in Ukraine. SCANDIC COIN is not actively marketed to the general EU public but is primarily aimed at professional users and existing clients who express interest on their own initiative — hence, no EU crypto service provider license is required. Nevertheless, SCANDIC complies with MiCA’s transparency and information obligations and files this whitepaper with the relevant supervisory authority. MiCA foresees staggered implementation deadlines (for stablecoins from June 2024, for other crypto-assets from December 2024); SCANDIC has proactively taken the necessary steps to ensure full compliance once the regulation enters into force. While potential stricter rules for “significant” tokens (with large market reach) do not apply to SCANDIC COIN due to its limited volume, the company continuously monitors regulatory developments.
Other Regulatory Regimes
Beyond the EU, additional legal frameworks have been analyzed to ensure comprehensive regulatory coverage. Particularly relevant are the regulations of the United Arab Emirates (UAE) and Ukraine, where SCANDIC entities are located, as well as international standards such as the FATF recommendations on anti-money laundering. The U.S. Howey Test was also examined to confirm that SCANDIC COIN does not qualify as a security (SCANDIC COIN offers no profit participation and therefore does not constitute an “investment contract” under U.S. law). In the United Kingdom, utility tokens are classified as “unregulated tokens,” meaning no authorization requirement applies. Switzerland permits the issuance of “utility tokens” without a financial market license, provided they do not serve a payment function. These international assessments confirm that SCANDIC COIN is positioned globally as a pure utility token — not subject to securities or e-money regulations — ensuring freedom in cross-border distribution.
Dubai / UAE (VARA Regime)
In Dubai, the Virtual Assets Regulation Law (VAL), Law No. 4/2022, created an independent regulatory framework and established the Virtual Assets Regulatory Authority (VARA) as the supervisory authority. Since 2023, VARA has issued detailed rulebooks for crypto activities. VARA requires that all virtual-asset activities in Dubai (such as exchanges, custody, brokerage, advisory, etc.) be licensed or registered in advance. However, the VARA regime is territorially limited: it applies within the Emirate of Dubai (including free zones but excluding DIFC) and generally does not extend to foreign companies unless they conduct activities within Dubai. Unlike MiCA, VARA does not have extraterritorial effect; foreign providers must comply only if they operate physically in the Emirate.
For SCANDIC COIN, this means that although the holding company SCANDIC ASSETS FZCO is based in Dubai, it does not carry out any operational business there (all token-related activities are managed through the Ukrainian entity). Therefore, no licensing obligation arises under the VARA Law; SCANDIC GROUP primarily falls under the EU MiCA framework (as a reference) and Ukrainian regulations. VARA-specific obligations — such as strict advertising warnings — do not apply to SCANDIC in Dubai. Nevertheless, SCANDIC voluntarily aligns its marketing and compliance standards with best practices under both MiCA and VARA. For example, promotional materials avoid any guarantees of value appreciation and always include a risk warning about volatility and total loss. This ensures SCANDIC voluntarily meets the highest standards of both regimes, even though only MiCA formally applies.
Ukraine
Ukraine adopted the Law “On Virtual Assets” (No. 2074-IX) in 2021/2022 to establish a legal framework for the circulation of crypto-assets. However, this law has not yet entered into force because the necessary amendments to tax legislation have not been implemented. Specifically, Law No. 2074-IX will take effect only when a separate tax law governing crypto-asset taxation is enacted — and such a law has not yet been adopted. In practice, this means that there is currently no active licensing requirement in Ukraine for the issuance or trading of virtual assets.
Accordingly, SCANDIC TRUST GROUP LLC does not currently require any national authorization to issue SCANDIC COIN. The planned issuance of a pure utility token within a closed ecosystem — without its own trading platform and without value or profit promises — would also not require a license under any foreseeable Ukrainian regulatory regime, as long as the token merely grants access to services.
Nonetheless, SCANDIC actively monitors regulatory developments. Ukraine has largely aligned its crypto framework with MiCA. SCANDIC GROUP has implemented appropriate monitoring processes and will obtain any future licenses or take additional compliance measures once further national provisions enter into force.
Legal Summary
From today’s perspective, there are no material legal obstacles to the issuance of SCANDIC COIN. A comprehensive legal review concluded:
- (1) SCANDIC COIN is classified as a utility token and is therefore neither a security nor e-money. No prospectus obligation exists; the MiCA whitepaper requirement is fulfilled by this document.
- (2) No VARA license is required, as no operational activities are conducted in Dubai.
- (3) The current Ukrainian legal framework requires no authorization; future amendments will be anticipated and observed.
- (4) Internationally, no regulatory-arbitrage risks exist, as SCANDIC COIN would also not be subject to regulation under the standards of the SEC (U.S.) or FCA (U.K.), being a utility token without yield promises.
The SCANDIC GROUP also emphasizes that it voluntarily complies with the highest compliance standards, even though SCANDIC COIN remains unregulated in some jurisdictions. This comprehensive whitepaper was produced despite the fact that SCANDIC COIN, as a “limited network token” under EU law, would be exempt from the MiCA obligation — solely to ensure maximum transparency. Likewise, its marketing strategy is handled conservatively (no exaggerated promises, documentation of customer contact to prove customer initiative under the reverse-solicitation principle). SCANDIC GROUP thereby proactively demonstrates responsible conduct in the pre-MiCA regulatory gray area and embodies the compliance culture of a regulated financial institution.
Comparison of regulatory regimes – Overview of the requirements under EU MiCA, VARA (Dubai), and Ukrainian law.
