What is a crypto whitepaper?

A crypto whitepaper is a document that sets out what a cryptocurrency or token project does, how its technology works and what rights the token gives. The name comes from the paper that launched bitcoin, covered in what the Bitcoin white paper is. Many projects have since published their own, often before a token sale or launch.

What is a cryptocurrency white paper?

Outside regulated markets, a whitepaper can contain whatever its authors choose. Some are detailed technical papers and others read like marketing. They are also snapshots in time. Ethereum's whitepaper, published in 2014 before the network launched, is kept online as a reference, but ethereum.org says it no longer reflects what Ethereum is today.

What is a crypto asset white paper under MiCA?

In the European Union, "crypto-asset white paper" is a legal term. Under MiCA, Article 6 sets out what one must contain for tokens other than stablecoins. It must describe the offeror and issuer, the project, the offer, the token and its rights and obligations, the underlying technology, the risks, and the main climate and environmental impacts of the consensus mechanism.

The paper must be fair, clear and not misleading, and it may not make claims about the token's future value. Its first page must state that no EU authority has approved it and that the offeror is solely responsible for its content. A risk warning must say the token may lose all or part of its value, may not always be transferable, may not be liquid, and is not covered by investor compensation or deposit guarantee schemes. A short summary in plain language must follow.

What is the MiCA white paper requirement?

Article 8 requires the white paper to be notified to the home country's regulator at least 20 working days before it is published. Regulators cannot demand to approve it first. The Dutch regulator AFM says that calling a document a "MiCAR-compliant white paper" is incorrect and misleading for this reason. ESMA, the EU markets authority, keeps a register of notified white papers.

Under Article 15, the offeror and its management can be liable to holders for losses caused by incomplete, unclear or misleading information in the paper. The AFM adds that trading platforms must make sure white papers exist for tokens admitted before December 30, 2024 by December 30, 2027.

How to read a crypto whitepaper?

A few questions help:

• Who is behind it? A MiCA paper must name the offeror and issuer. Anonymous teams are harder to hold to account.
• What does the token actually do? Look for the rights it gives and whether it is needed for the product at all.
• How is supply handled? Allocation, unlocks and issuance are core to tokenomics.
• What are the risks? Read the risk section in full, not only the summary.
• Is it current? Check the date and compare it with what the project has since delivered.

A whitepaper is written by the project itself. It is a starting point for researching a crypto project, not proof that a claim is true.