401 | DLT Academy | Compliance & Legal Engineering

Overview and Purpose

As digital securities transition from pilot programs to fully regulated financial instruments, regulatory alignment is no longer optional, it is foundational. For institutions operating in Switzerland and the European Union, legal compliance is defined by a complex intersection of financial market law, distributed ledger legislation and cross-border securities directives.

This faculty is designed to equip legal counsel, structuring teams,and compliance officers with the technical understanding and practical tools needed to operate under Switzerland’s FinSA, FinMIA and the DLT Act, as well as the European Union’s Markets in Crypto-Assets Regulation (MiCA) and MiFID II. Participants will gain the ability to map asset structures to legal classifications, prepare regulator-ready documentation and implement compliant token issuance and trading strategies.

Learning Objectives

By completing this faculty, participants will be able to:

• Interpret the core legal frameworks that govern tokenized financial instruments across Switzerland and the EU
• Differentiate between DLT-based security tokens and unregulated crypto-assets under legal and supervisory definitions
• Apply FinSA, FinMIA and DLT Act provisions to structure compliant digital issuances and platforms
• Understand MiCA’s asset classification regime, disclosure requirements and licensing pathways
• Prepare institutions for prospectus exemptions, licensing readiness and cross-border recognition

Modules and Core Competencies

4.1 DLT Laws (FinSA, FinMIA, DLT Act, MiCA)

Core legal frameworks and classifications

Module 4.1 – DLT Laws (FinSA, FinMIA, DLT Act, MiCA)

Understanding foundational regulation for institutional tokenization in Switzerland and the European Union

1. Introduction: Why Legal Structuring Defines Market Access

DLT-based financial products must align with the same legal requirements that govern traditional securities—only with additional considerations for technological neutrality, cross-jurisdictional enforceability and on-chain compliance. Legal structuring is not a post-launch consideration; it is a precondition for issuance, secondary trading, investor protection and regulatory acceptance.

Whether launching a revenue-sharing token, a fund participation instrument, or a decentralized trading venue, institutions must begin with the right legal frameworks. This module introduces the statutory pillars that define how tokenized assets are classified, regulated and licensed across key European jurisdictions.

2. Key Concepts & Deep Dive

A. Switzerland: FinSA, FinMIA and the DLT Act

Financial Services Act (FinSA)
FinSA governs investor protection and disclosure obligations. It defines when a prospectus is required, how financial instruments are classified, and what investor segmentation applies.

• Art. 36 FinSA allows prospectus exemptions for certain private placements
• Client segmentation (retail, professional, institutional) determines the disclosure and distribution requirements
• Suitability and appropriateness tests are mandatory for non-professional investors

Financial Market Infrastructure Act (FinMIA)
FinMIA regulates the trading of financial instruments and the operation of market infrastructures.

• Articles 73a–73f FinMIA establish the framework for DLT trading facilities, including licensing, transparency, custody and participant access
• Emphasis is placed on fair and orderly trading, central custody logic and real-time reporting
• Small-scale operators may apply for simplified registration under Art. 73f

Swiss DLT Act (2021)
The DLT Act amended both FinSA and FinMIA, introducing uncertificated register securities under Article 973d of the Swiss Code of Obligations.

• Allows legally enforceable digital securities to be registered directly on a blockchain
• Enables the issuance and transfer of securities without paper certificates or intermediaries
• Requires that the ledger system meets standards for integrity, availability and consensus

GXFlex and other GX-issued tokens are structured under Art. 973d CO, offering full legal enforceability as DLT-based securities while integrating with XRPL infrastructure.

B. European Union: MiCA and MiFID II

Markets in Crypto-Assets Regulation (MiCA)
MiCA is the EU’s foundational regulation for unregulated crypto-assets and stablecoins. It comes into effect progressively through 2024–2025.

MiCA does not apply to financial instruments under MiFID II. Instead, it creates a separate licensing framework for:

• Asset-referenced tokens (ARTs): backed by multiple assets
• E-money tokens (EMTs): pegged to one fiat currency
• Other crypto-assets: such as utility tokens and non-MiFID digital assets

MiCA introduces:

• Whitepaper obligations for public offers
• VASP licensing for crypto service providers
• Stablecoin authorization requirements under the European Banking Authority

Markets in Financial Instruments Directive (MiFID II)
If a digital asset qualifies as a financial instrument (e.g., security token, derivative, unit in a fund), it is regulated under MiFID II.

• Requires authorization for trading venues (MTFs, OTFs, DLT TSSs)
• Triggers prospectus, PRIIPs and MAR compliance obligations
• Recognizes tokenized instruments if they maintain the economic and legal structure of MiFID-classified assets

Institutional security tokens like GXFlex, ALTVolt and DLT256 must be structured to meet MiFID II classification tests if distributed to EU investors.

3. Legal Classification of Digital Assets

The classification of a tokenized asset depends on its legal structure, investor rights and economic function—not the blockchain or smart contract it uses.

Digital Security | Art. 973d CO / MiFID IIProspectus or exemption under FinSA or EU Prospectus Reg.
‍Utility Token | MiCA (if not a financial instrument)Whitepaper & issuer registration
‍Stablecoin | MiCA – ART or EMTCentral bank or EBA supervision
‍Cryptocurrency | Outside financial regulation

Institutions must conduct a classification analysis prior to issuance, ensuring investor documentation, rights assignment and token infrastructure align with the selected legal pathway.

4. Summary: Key Takeaways

• Swiss law (FinSA, FinMIA and the DLT Act) enables the issuance and trading of fully compliant digital securities on DLT systems.
• MiCA regulates crypto-assets that fall outside the scope of MiFID II and introduces licensing, disclosure and custody requirements.
• Legal classification depends on the rights the token represents—not the technology it uses.
• Issuers must prepare prospectus-equivalent documentation, implement AML procedures and apply for appropriate exemptions or licenses.
• Regulatory alignment must be embedded in structuring from day one, particularly for cross-border offerings and secondary market platforms.

5. Next Steps & Related Modules

Continue to: Module 4.2 – Article 73a–73f FinMIA Deep Dive
Explore how to structure, license, or exempt a DLT trading venue under Swiss law and how GX Securities approaches its licensing path.

Recommended: Module 4.3 – Prospectus Writing & Legal Disclosure
Learn how to draft and validate token prospectuses under FinSA and MiCA and apply Art. 36 exemptions with legal precision.
‍

Discover how GX Securities leverages the XRP Ledger for compliant DeFi infrastructure and tokenized asset operations visit www.gxsecurities.com | Institutional DeFi on XRPL | GX Securities Blog

Contact us at compliance@gxsecurities.com or send us an inquiry

‍Disclaimer: GX Securities operates solely as a DLT infrastructure provider and this article does not constitute financial advice or an offer of securities.

‍