By Thomas Kulnigg, Denisa Lazarescu
Schoenherr and CONDA AG (“CONDA”) have succeeded in digitalising the shares of the joint stock company and enabled registered shares to be managed via blockchain technology. Schoenherr advised CONDA on the digitalisation of its shares, which is the first time that shares in an Austrian joint stock company were linked to digital tokens. Founded in Austria and available across Europe, CONDA’s alternative financing platform aims to set new standards for the processes surrounding security tokens. This transaction illustrates the trailblazing role that CONDA and Schoenherr are playing in Europe by building a platform for the issuance of securities tokens.
“We were pleased to lend our support to structuring the first ever digitalisation of shares belonging to an Austrian joint stock company,” explained Schoenherr corporate m&a partner Thomas Kulnigg. “The successful transaction underscores Schoenherr’s strength as the leading legal advisor in the field of technology & digitalisation,” said Kulnigg, who also heads the start-up service at Schoenherr. Thomas Kulnigg previously advised CONDA on its ICO (initial coin offering).
From a legal standpoint, the transaction was challenging because neither courts nor legal scholars have yet shed light on the issue of allowing the segmentation of registered shares in the form of tokens. Also, there are no guidelines on the legal implementation of a transaction involving the digitalisation of shares.
Tokens are digital units which were mined exclusively by CONDA based on a blockchain (distributed ledger technology) protocol and given to the company shareholders. Each token represents one share in CONDA AG. When a shareholder transfers a token to another person, the transfer is recorded in the blockchain and, on that basis, the transfer is also registered in CONDA’s share ledger. The transfer of a token is thus the equivalent of a share transfer.
The Schoenherr team which advised CONDA consisted of Thomas Kulnigg (partner, corporate/m&a), Zurab Simonishvili (associate, corporate/m&a), and Sascha Smets (associate, corporate/m&a).
The crowdinvesting platform CONDA brings together companies searching for financing with small investors in a professional setting. Innovative start-ups, established SMEs, and real estate projects present themselves on CONDA, and try to persuade the crowd of investors of the viability of their growth plans and vision. By developing the CRWD Network – a blockchain based network of crowdinvesting platforms – CONDA AG, the market leader in CEE and the German speaking world, is setting new international standards for securities tokens and is expanding its offer for the technical support in the issuance of securities tokens.