Writing Important Blockchain Project Documents
Blockchain project’s documentation includes crucial agreements like terms of use, privacy policy and user agreement. At the time of initiating a new blockchain project, these are the essential legal documents that are necessary for the successful launch of the blockchain project. I routinely draft blockchain project documents, and this article is meant to highlight the need and contents of each of the document that forms an important part of blockchain project documentation.
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Blockchain Project Terms of Service
With a view to establish a successful agreement with the user of a blockchain project, it is essential to explain the formation of an agreement between the user and the blockchain project platform. The first requirement is to let the user know how the blockchain project Terms of Service get legally binding. Is it by clicking the “I accept” button or using the website? The user must have the notice of such blockchain project agreement by way of actual notice or constructive notice. Specify that accessing, browsing and using the site is subject to the terms and conditions and applicable laws. In case of any amendments to the blockchain project agreement, or if the website terms are subject to changes, mention the same. Likewise, will the website notify the user of changes to the documents? Mention how the user will be informed about the same.
Blockchain Project Privacy Policy
The blockchain project privacy policy contains a number of components. Each section should detail how the blockchain project company uses personal data and the methods it uses to secure it. The policy should also explain the right of users to opt-out of the collection of certain information and how it is protected. It should also detail how users can contact the blockchain project company if they have questions or concerns about its use of personal data.
Here are some of the most important aspects of the blockchain project privacy policy: An effective Privacy Policy includes a clear statement about when a user can leave comments. This information should be clearly stated and can be obtained through various ways, including social media and the website itself. For blockchain project websites that allow users to leave comments, it is a good idea to create a separate section for user comments. Some blockchain project privacy policies also state that the company reserves the right to request additional information. In any case, the content should be clear and easy to read.
A blockchain project privacy policy should include a list of the types of personal data collected. Listed data includes names, addresses, phone numbers, email addresses, and location. The list should also state whether it is necessary to collect certain data, as per privacy laws. The policy should also include the reasons why a company needs personal data. Moreover, the blockchain project privacy policy should clearly outline the methods by which personal information will be used by the blockchain project company. A blockchain project privacy policy should also include information on how to contact the blockchain project company.
Eligibility of Users of Blockchain Project
The minimum age for website users. Minimum age criteria depend on Service to Service and what age restrictions they need. However, a number of legal issues can come up if the user is a minor. For instance, ToS will not be enforceable for minors in India. Also, if the website targets US or UK, data protection law may impose an additional burden for processing or storing any personal data provided by a minor. Therefore, after considering all factors, set out whether the blockchain project website is directed towards minors or not.
About the Blockchain Project Website
This clause is not mandatory, but it is better to provide a brief introduction of the website and what Service you offer. Mention what is the website all about and how the user can participate in the platform. If the information mentioned above is included in the whitepaper, consider providing the link.
Rights and Obligations of the User
This clause states the contractual rights and obligations the user must comply with to enjoy the Service. On the website where crypto-related transactions occur, it is important to have accurate identification. Further, the user must abide by the policy of the company.
Sales Terms and Conditions
The terms and condition is laid down to define rights and obligations in connection with the sale and purchase of the product offered by the blockchain project. Mention the company’s policies for the sale and purchase of NFT or Crypto or Tokens in the link. Further, it is important to mention that the product price is subject to change, and such price will include the tax levied as per the country’s regulation. Mention whether tax is included in the price of the product or not.
Blockchain Project Payments
This clause will address questions like, how are payments made? Who will be responsible for any loss arising out of the transaction? How is payment deducted? And what will happen when payment is made? Since, in most cases, crypto-related websites use third-party infrastructure (like Ethereum network, metamask) for any financial transactions, consider absolving the liability arising out of the failed transaction.
Mention the gas fee the payment gateway deducts for processing the transaction. If there’s any commission involved, you, the website owner or the NFT owner collect a commission as a part of the payment.
Limitation of Liability
This clause should attempt to exclude liability for consequential loss or liability arising from the user or third-party infringement. One may also consider capping the liability to a specific amount for the damage caused due to website fault. In contrast, if the website provides the Service on “as in” “as available” basis, there is a chance that the court might strike down the clause of such exclusion of liability.
Privacy and Use of cookies
If the blockchain project website stores or uses data about the user or cookies, it is crucial to align with the data protection laws. It is advisable to link the privacy policy to the terms of Service.
Data Transfer
If the company is dealing with user data from multiple countries or is transferring data to another country, maintain different data standards. Mention cross border data transfer is dealt with and protected for users interacting with the blockchain project.
Breach of Terms of Use
One may consider specifying types of actions that are prohibited by this provision. And in the event of a breach, will that lead to account suspension or deletion? Mention any other action you might take against the acts of infringement that are executed via the blockchain project.
Governing Law and Jurisdiction
Mention which law should apply to and govern the document. Also, specify whether the jurisdiction will be exclusive or per the particular country.
Blockchain Project Privacy Policy
First and foremost, let the user know about the website’s method (GDPR/APPs/PIPEDA) to secure the data, where the information is stored, the security of data, the rectification of data, and the rights of the data subject. It is also important to define personal data collection and how they are used by the blockchain project. Acknowledge all information the website intends to collect or store for a specific purpose. By user information, it means both direct and automated collection of data. Further, both personally identifiable information and sensitive personal information should be clear. PII may include name, address, user name or alias, public Ethereum address and cookies and usage data. The usage of data collected shall be communicated to the user.
Third-party Access
The blockchain project website might share information with third-party plugins for advertisement or tracing purposes, and it’s essential to keep the user informed of such data sharing. If the website does not collect PII or SPD for this purpose, then mention it in this provision.
Besides, it is important to mention that since third parties might have their own privacy policy, the website can exempt itself from any policy discrepancies. Therefore, it’s advisable to include a link to the privacy policy of third-party plugins.
Cookies and Web Beacon
If the website use cookies or web bacon to track the user or provide personalized services, mention the same while describing how cookies and web beacons are used on the website. Any anonymized data like IP address and os type of the user is being stored should be informed along with its use. Your company might discourage the collection of minor’s data. It’s advisable to mention the same and advise guardians to monitor/observe/guide their online activities.
Blockchain Project Cookie Policy
First and foremost, mention what type of cookies the website include (session/persistent/third party)? Cookie policy should comply with the regulation of said jurisdiction. For instance, for GDPR, the browsing activity of cookies should be as per Recital 30, supported by Recital 26. On the other hand, if the website developed in India will involve European users, then due regard has to be given to both countries’ privacy laws. Simply put, the adopted cookie policy must be in conformity with the rules of foreign and local laws. Describe how the website uses cookies and why cookies are being used. The data subject must have the choice to choose and accept or decline all cookies or select as preferred.
Blockchain Project Legal Disclaimer
As mandated by several countries, exchanges featuring products like virtual assets must have a disclaimer stating, “Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions.”
In addition to the crucial points stated here relating to data privacy of blockchain projects, the future business models based on blockchain innovations may regularly need assistance for blockchain Patent Searching. The results of a patent search report for blockchain projects can assist in determining if Patent Drafting for blockchain is the next step for blockchain International Patent Filing along with blockchain USPTO Patent Filing. In case of blockchain based business models, utility token Legal Opinion Letters may also be needed for blockchain projects, along with a set of applicable blockchain contracts and blockchain agreements.
