RWA Project Analysis: Concept, Regulation and Compliance Recommendations

Recently, the RWA( real-world asset ) project has attracted significant attention in the Web3 field. As a professional legal team, we have conducted an in-depth analysis of the RWA concept and provided recommendations regarding its regulatory and Compliance issues.

1. Definition of RWA Concept

RWA is a financing project that tokenizes real-world assets through blockchain technology. A true RWA project should have the following characteristics:

1. Based on real and verifiable real assets
2. Tokenize assets on the chain
3. Digital assets have clear ownership value.
4. The issuance and circulation comply with legal regulations and are subject to administrative supervision.

RWA projects are mainly divided into two categories:

1. Narrow RWA: Directly tokenizing physical assets on the chain.
2. STO( Security Token Offering ): Bringing financial assets on-chain

2. RWA Project Compliance Hierarchy

The compliance of RWA projects can be divided into four levels:

1. Sandbox Compliance: such as the Ensemble sandbox project of the Hong Kong Monetary Authority
2. Compliance of Hong Kong Administrative Regulation: Incorporate into the STO framework for compliance management
3. Clear regulatory framework in crypto-friendly regions: such as the United States, Singapore, etc.
4. "Broad Compliance": Not recognized as a violation in certain offshore areas temporarily.

3. Lawyer Recommendations for RWA Projects

1. Choose a policy-friendly jurisdiction
2. Ensure that the underlying assets are real and redeemable.
3. Gain investor recognition and establish an investor screening mechanism.
4. Ensure that all operational procedures comply with regulations
5. Preventing Post-Compliance Risks
6. Emphasize Brand Reputation Management

Conclusion

RWA projects are at the forefront of innovation and face numerous uncertainties. We advise project parties:

• Actively carry out "self-compliance" work
• Establish a clear Compliance strategy
• Maintain policy sensitivity
• Promote industry standardization under the rule of law framework

Respecting existing legal regulations is the foundation of all innovation. Only under the premise of Compliance can RWA projects develop healthily and sustainably.