Whitepaper Registration Explainer

Sonar Official
3 min readOct 31, 2022

A breakdown of the process of regulatory compliance.

One of the most recurring questions in our community channels is when/wen whitepaper registration will be completed? A short question but not necessarily a short one to answer.

Most commonly people are told that it takes 6 — 9 months, which is correct, but which doesn’t really clarify the how and why, so let’s start with the how first.

The How

The whitepaper that is being prepared for government audit and registration is very different from the initial public whitepaper available on the website and is a process with two major steps:

Step one, the whitepaper we are registering is about 3 times the length of the published one. It needs to comply with various requirements found in the Virtual Financial Assets Act and MFSA VFA rules for issuers (including; team, company, risk, tokenomics, disclosures, restrictions, etc.) which you can find HERE:

It has undergone at least 10 (and counting) iterations between the founders and legal team thus far.

It is best to view this as a 100 page document that is a mix between a legal declaration, a business plan and a governance management document geared specifically towards government regulators.

It is a document that focuses on legal, risk, compliance, and governance related areas and much less on platform benefits and addressable market.

Once this is completed and reviewed by the Virtual Financial Asset team at the Malta Financial Services Authority, step two kicks off, which is a systems audit conducted by a registered systems auditor with the Malta Digital Innovation Authority (MDIA).

The outcome of this is a Systems Audit Report, which focuses on auditing the smart contract(s), wallet, blockchain, infrastructure, etc. and focuses on ensuring that the proper risk management and safeguards are in place from a technology perspective. This is complementary to the smart contract audit which was conducted by TechRate in June 2021.

When these two steps are completed and passed, the whitepaper is approved and registered together with supporting documents (application form, systems audit report, supporting documents, MFSA application fee etc.)

Awesome, but why are we going through all this pain you ask?

The Why

A wide variety of reasons, the most important one is that we are doing this for you, our readers, coin holders, and community.

Whitepaper registration means that we are running official and certified operations in cryptocurrency and decentralized finance. With this comes the provision of protection of long-term investors, prevention of fraudulent activities in our crypto ecosystem and provides clear, legal, guidance that allows companies to innovate in the crypto economy space.

There is a chance that whitepaper registration will become a potential requirement for MiCA compliance or that it simplifies MiCA compliance greatly, so we wish to be prepared for this as it enables free flow operations within the EU.

Lastly, but certainly not least, whitepaper registration is a prerequisite for Tier1 exchange listing. Which, as I’m sure you know, is a BIG thing for the platform and token.

So When?

Probably in the next 2 — 6 months. It is extremely hard to predict the exact timeline as we are subject to the availability of various government entities and jurisdictions. Submission doesn’t mean instant approval, often there are questions, additional items to address, check, review, rewrite, resubmit, etc.

So wen? Sūn!

Cheers,

Iwan

--

--