Blockchain 2023

Last Updated May 23, 2023


Law and Practice


Cases & Lacambra is a client-focused international law firm with a cornerstone financial services practice. With a presence in Europe and America, the firm has a tested track record in complex transactions involving the financial sector, special situations, financial markets regulations, cross-border disputes and transactions with relevant tax aspects. Its financial services group is composed of four partners, two counsels, and three associates, and most of the members of the team have profound knowledge of banking and finance regulations and capital markets transactions. The firm’s practice also extends to include capital markets, derivatives and structured finance matters.

The Principality of Andorra (“Andorra”) has experienced impressive growth and development recently due to its economic openness. The Monetary Agreement with the EU has played a crucial role in strengthening Andorra’s legal framework and driving unprecedented progress.

The Andorran government has shown an interest in embracing emerging technologies and fostering innovation and is actively encouraging the adoption of cutting-edge and transformative technological tools, such as digital identity, distributed ledger technologies and artificial intelligence. The primary focus is on digitalisation, encompassing both the public sphere and the private sector. Additionally, Andorran public institutions are working towards a comprehensive economic transformation to attract new investments, with a particular emphasis on emerging and trendy niche markets like fintech, eSports, start-ups and companies specialising in distributed blockchain technologies across several industries.

New legislative measures showcase Andorra’s commitment to staying at the forefront of technological advancements and creating a favourable environment for digital innovation and financial activities. Key pieces of legislation have been approved over the past 12 months and could shape and materialise opportunities and challenges faced by the industry in this jurisdiction:

  • Act 24/2022 on the digital representation of assets, cryptography, and the application of distributed ledger technology (DLT) and blockchain technology (the “Digital Assets Act”).
  • Regulation for the development of the Digital Assets Act:
    1. Decree 478/2022 approving the regulation for the development of requirements to act as a registered digital intermediary.
  • Act 42/2022 on digital economy, entrepreneurship and innovation (the “Digital Economy Act”).
  • Regulations for the development of the Digital Economy Act:
    1. Regulation for the development of the controlled testing environment or sandbox, implemented by means of Decree 211/2023 approving the regulation for the development of the Digital Economy Act, concerning the controlled testing environment or sandbox (the “Sandbox Regulation”).
    2. Regulation for the creation of the registry of start-up commercial companies, implemented by means of Decree 213/2023, amending the Decree of 16 April 2014, approving the regulation for the implementation of the Act on anonymous and limited liability companies (the “Start-up Regulation”).
    3. Regulation of digital nomads, entrepreneur visas, and promotion of the digital economy, implemented by means of Decree 212/2023 approving the regulation that implements Articles 46, 47 and 51 of Law 42/2022 on the digital economy, entrepreneurship and innovation, which amend Articles 38 bis.2.a, 38 ter.2.B.d, 101 quinquies.a, and 101.septies.a of Act 9/2012 amending the Qualified Immigration Act (the “Digital Nomads Regulation”).
  • Act 37/2021, amending Act 14/2017, on the prevention of, and fight against, money laundering and the financing of terrorism (the “AML/CFT Act”).

The ongoing negotiations of the “Association Agreement” between Andorra and the EU are of significant importance for the blockchain and cryptocurrency markets in Andorra. These negotiations, expected to be completed within a year, will have a significant impact on the future opportunities and challenges faced by the industry.

As a result of these developments, new regulations specifically tailored to blockchain and cryptocurrencies are anticipated. This includes the development and amendments within the Digital Assets Act as a result of the implementation of the EU Markets in Crypto-assets Regulation (MiCA). The successful conclusion of the Association Agreement will not only strengthen Andorra’s economic ties with the EU, but also encourage collaboration in the field of blockchain technology. This collaboration will open up new avenues for growth, and position Andorra as an attractive market for blockchain ventures.

Andorra is at the forefront of blockchain implementation across multiple sectors, with a particular emphasis on the financial industry. They are actively exploring blockchain solutions for cross-border payments, remittances and digital identity verification. Moreover, the real estate and supply chain sectors are also embracing blockchain technology. Recent developments in Andorra highlight exciting projects in non-fungible token (NFT) platforms and cryptocurrency payment systems, showcasing Andorra’s commitment to innovation.

Consumer-oriented applications of blockchain in Andorra enhance convenience and security for individuals through digital payments, loyalty programmes and personal data management. On the other hand, business-to-business applications focus on streamlining supply chain management, facilitating intercompany transactions, and enabling asset tokenisation. These efforts aim to boost efficiency and transparency in business operations.

It is worth noting that use cases and strategies may vary across sectors, tailoring the implementation to the specific needs of businesses and individuals. Andorra’s progress in adopting blockchain technology underscores its dedication to leveraging cutting-edge solutions for economic advancement.

The use of decentralised finance (DeFi) protocols in Andorra is regulated under the Digital Assets Act, requiring a licence to operate therein. DeFi activities are classified as special activities and subject to their own legal framework, focusing on registration, authorisation, supervision, monitoring and control. To operate in Andorra, platforms must meet minimum requirements defined in Article 25 of the Digital Assets Act that are verified by the Andorran Financial Authority (AFA).

This regulatory approach ensures a secure environment for DeFi operations, promoting transparency, consumer protection and financial stability. By enforcing licensing and conducting thorough assessments, Andorra aims to maintain regulatory compliance and mitigate potential risks associated with DeFi activities.

In Andorra, the use of NFTs is experiencing a dynamic and evolving environment. Marketplaces, exchange platforms, and data storage solutions for NFTs are emerging to meet growing demand. These activities are under the scope of the Digital Assets Act.

As the market expands, Andorra may establish regulatory frameworks to address these concerns. Authorities will closely monitor the NFT market and adapt regulations as needed to ensure a fair and secure environment for residents engaging in NFT activities. Andorra’s authorities (AFA and UIFAND) are likely to monitor the NFT market closely and adapt regulations as necessary to create a fair and secure environment for NFT transactions, safeguarding the interests of residents engaging in NFT-related activities.

Andorra has implemented a specific regulatory regime for market participants using blockchain technology and cryptocurrencies. The Digital Assets Act serves as the cornerstone of this framework, addressing the issuance, exchange, custody, and intermediation of digital assets, including cryptocurrencies. It establishes licensing requirements, AML measures, consumer protection provisions, and other regulations specific to this sector.

Andorra’s regulatory regime is purpose-built and not retrofitted from existing frameworks, demonstrating the country’s commitment to adapt to the evolving landscape of blockchain and cryptocurrencies. As a small independent country, Andorra’s regulatory framework operates within its national legal framework and is not directly governed by EU regulations or other supranational laws. However, Andorra is aligned with international standards and practices through agreements and measures to ensure compliance and foster co-operation in relevant areas of interest.

Andorra’s regulatory landscape for blockchain and cryptocurrencies is evolving with laws favouring technology and innovation. Andorra has implemented specific laws and regulations targeting the blockchain sector and virtual asset service providers (VASPs) through the Digital Assets Act and the Digital Economy Act, which establish a favourable regulatory environment for technology and innovation, including blockchain technology and cryptocurrencies.

Andorra is a member of the Financial Action Task Force (FATF) and has committed to implementing its recommendations. The FATF’s recommendations, including the Travel Rule, provide guidance on AML and CFT measures for virtual assets and VASPs. While there are no specific VASP laws or regulations, Andorra has taken steps to address AML and CFT risks through the Digital Economy Act.

In Andorra, the regulatory bodies most relevant to businesses or individuals using blockchain technology are as follows:

  • Andorran Financial Authority (AFA): The AFA is the supervisory authority for the activity of digital representation of assets, responsible for supervising and regulating financial activities, including those related to blockchain and cryptocurrencies. Its focus is to enforce licensing requirements, AML measures and consumer protection provisions. For this purpose, the AFA registers, initiates, processes, promotes and resolves sanctioning procedures, and determines the corresponding sanctions when the alleged infringement has been committed by operational entities.
  • Financial Intelligence Unit of Andorra (UIFAND): The UIFAND plays a crucial role in overseeing businesses and individuals using blockchain technologies in relation to AML and CFT. The UIFAND ensures compliance with AML/CFT regulations, including customer due diligence, risk-based controls and reporting suspicious transactions. The UIFAND’s responsibilities encompass monitoring compliance, conducting audits and taking enforcement actions to uphold the financial system’s integrity and combat illicit financial activities in Andorra.
  • Data Protection Agency (APDA): The APDA is responsible for data protection and privacy. It ensures that blockchain users comply with data protection rules, and protects individuals’ rights regarding their personal information.

In response to the significant bankruptcies in the blockchain sector in 2022, notable changes have been observed in the approach of various bodies, particularly the AFA. They have adopted a more open approach towards the digital assets environment.

Currently, there are no self-regulatory organisations or trade groups in Andorra that have specific regulatory or quasi-regulatory roles pertaining to businesses or individuals involved in blockchain technology.

To this date, there is a lack of significant case law and specific precedents regarding the legal framework surrounding the use of blockchain technology. Additionally, there are no ongoing legal disputes directly related to the blockchain sector.

As of today, there have been no enforcement actions in Andorra that have defined the regulatory boundaries for blockchain activities, which could help market participants to better understand the “regulatory perimeter” of permitted and prohibited activity using blockchain.

The Andorran regulatory framework is currently being developed and is subject to ongoing progress and developments. As the blockchain industry continues to expand, it is expected that additional guidance and enforcement actions will contribute to a clearer understanding of the regulatory landscape for market participants in Andorra over the forthcoming years.

Currently, there is no regulatory sandbox specifically designed for blockchain projects in Andorra. However, the recently approved Sandbox Regulation, effective as of May 2023, promotes innovation and the development of new technologies and services while protecting consumers and maintaining market stability. It sets out requirements, evaluation criteria, protocols and supervisory responsibilities for initiatives conducted within the sandbox. Additionally, it establishes a registry for the controlled testing environment.

This new regulatory framework allows companies and entrepreneurs to test their blockchain-based innovations, ideas, solutions and business models in a controlled and limited setting, providing regulatory flexibility. Consequently, it is anticipated that new blockchain projects will emerge in Andorra in the coming years.

According to the Digital Assets Act, digital currencies or cryptocurrencies are considered intangible assets for accounting and tax purposes. Their consideration as fixed assets is determined by their own function. Income obtained using cryptocurrencies will have to be declared for personal income tax purposes. The exchange of cryptocurrencies for fiat money or other cryptocurrencies can be an onerous transfer or a free transfer of assets.

Mining shall not be subject to general indirect tax (IGI), if it is not an economic activity.

The transfer of cryptocurrencies shall be subject to IGI, in so far as it is treated as a payment instrument allowing the transfer or movement of money or as a payment order.

Income derived from the transfer of virtual currencies, previously acquired as an investment, is considered as a capital gain or loss to be included in the savings tax base, provided that such income does not arise because of its transfer.

Currently, Andorra does not have any governmental bodies or law reform bodies dedicated to forming “task forces” or mandated bodies that specifically investigate the benefits and challenges associated with blockchain technology.

In Andorra, ownership of a digital asset transferred via a blockchain network is determined by the network’s rules. The specific rules governing the finalisation of transfers depend on the technical design of the blockchain and the applicable legal agreements or regulations currently in place. Furthermore, off-chain agreements or legal frameworks can be employed alongside the blockchain to govern the ownership and transfer of digital assets.

The Digital Assets Act foresees a general taxonomy for digital assets: security tokens which qualify as financial instruments according to Andorran laws, e-money tokens, and utility tokens for which the issuer confers access to a product, service or platform. In addition, this piece of legislation also defines NFTs and stablecoins.

However, there are no specific technical communications or statements issued by the AFA developing the nature and functionalities of security tokens.

The Digital Assets Act defines stablecoins as digital units of value that do not have a specific form of fiat money and which, when referenced to an asset or a combination of several underlying physical or digital monetary assets, have the functionality of:

  • a stabilising tool in order to minimise their price to fiat money;
  • a means of payment;
  • an alternative store of value or functional income insurance through the collateralisation of less volatile assets; or
  • a combination of the above.

There are three types of stablecoins:

  • stablecoins of monetary funds or tokenised funds or fiat-backet stablecoins;
  • hybrid money stablecoins; and
  • collateralised asset-backed stablecoins.

For every category, the Digital Assets Act establishes a particular licence granted by the AFA.

In Andorra, the use of cryptocurrencies for payment purposes exists in a regulatory grey area. Several factors should be taken into consideration: nature of the transaction, payment flows, notarial deed and AML requirements.

Despite the issuance of NFTs being excluded from the Digital Assets Act, other services related to them are not. Therefore, in such cases, the applicant will need to appoint a registered digital observer (“veedor digital registrat”) to submit the corresponding application to the AFA.

The registered digital observer is appointed as a representative and is responsible for submitting the relevant applications to the AFA on behalf of the applicant. This requirement ensures compliance with regulatory procedures and facilitates the proper handling of NFT related activities.

Article 21 of the Digital Assets Act regulates the legal framework for digital asset trading platforms. These platforms enable third parties to express their interest in buying or selling digital assets and interact through predefined purchase and sale contracts. Exchange of digital assets for other assets or legal tender is permitted.

Licences are required for each activity, including custody services, which require two separate licences for trading and custody. Token trading platforms must obtain licences based on specific economic criteria or transaction volume. In the secondary token market, companies must maintain an order book and facilitate price matching. Currently, there are no authorised markets or platforms by the AFA. However, authorisations are expected to be granted starting from the second half of 2023.

Additionally, Article 29 establishes the Andorra Digital Exchange or “AndorraDex” as a regulated trading platform for blockchain-based digital assets, integrating trading, settlement, clearing, infrastructure and custody operations under the Ministry of Finance’s supervision. The governing body of AndorraDex will ensure fair and orderly trading, effective order execution, technical management, contingency procedures and settlement facilitation.

As of today, there are no authorised markets or platforms by the AFA. As a result, investors are conducting exchanges directly through international operators who operate using foreign platforms and wallets. However, it is anticipated that authorisations for domestic markets and platforms will be granted starting from the second half of 2023. Once these authorisations are in place, investors will have access to regulated and authorised platforms within Andorra, providing a more secure and compliant environment for their digital asset trading activities.

Currently, there are no authorised platforms in Andorra, leading investors to conduct exchanges directly through international operators. Both exchange platforms and custodial wallet providers are subject to AML laws.

To obtain licences under the Digital Assets Act, exchange platforms and custodial wallet providers must implement AML protocols. These protocols and compliance measures need to be included in the application for authorisation. Adhering to AML regulations is essential as it aims to prevent money laundering and ensures that all digital asset transactions are conducted securely and in compliance with the law. The establishment of authorised platforms will provide businesses with a regulated environment, fostering transparency and trust within the blockchain ecosystem. By prioritising regulatory certainty and strict compliance requirements, the industry can promote legitimacy, safeguard investor interests and contribute to the overall growth and development of the blockchain sector.

In Andorra, the activity of exchanging cryptocurrencies with fiat or among themselves requires authorisation. The AFA serves as the sole regulatory entity overseeing this process. As part of the authorisation application, protocols addressing conflicts of interest and market abuse must be included. These regulatory measures aim to create a secure and transparent environment for digital asset trading in the country.

By ensuring compliance with AML regulations and addressing potential conflicts of interest, Andorra’s regulatory framework promotes integrity and safeguards against illicit activities in the digital asset space. These measures contribute to the overall growth and development of the digital asset industry in Andorra.

Andorran laws do not provide specific information on the use of digital assets as collateral.

The current regulatory framework in Andorra lacks a specific definition for “hot” and “cold” storage solutions for digital assets. Instead, the regulations broadly encompass the custodian role without making a clear distinction between the two types of storage.

According to the Digital Assets Act, a provider of electronic wallet custody services is defined as an entity that safeguards the clients’ private cryptographic keys for the storage, deposit and transfer of virtual currency. Although the legislation does not explicitly differentiate between hot and cold storage, custodial service providers must comply with the legal requirements to ensure the security and protection of clients’ digital assets.

The Digital Assets Act foresees the legal framework applicable to the issue of digital assets – both to the public in general and private placement. If fundraising and the subsequent sale of digital assets are deemed to qualify as issuance or private placement, it may trigger licensing requirements.

In line with the aforementioned, any company wishing to issue digital assets in Andorra will be required to publish the corresponding White Paper.

The mere admission of digital assets to trading on a multilateral trading facility, or the publication of the purchase and sale prices, is not in itself considered to constitute a public offering of digital assets. Only in the event that these situations are accompanied by a communication to the public in general, is the preparation and registration of a White Paper required. Note that the Digital Assets Law also states when a White Paper is not required:

  • an offering of digital assets addressed exclusively to professional clients;
  • an offering of digital assets addressed to fewer than 100 natural or legal persons, excluding professional clients;
  • a digital asset offering with a denomination per unit of at least EUR50,000;
  • digital asset offerings to investors purchasing digital assets for a total amount of at least EUR50,000 per investor;
  • an offer of digital assets for a total amount of less than EUR100,000; and
  • any subsequent resale of digital assets that has previously been subject to one or more of the above types of exemption.

The Digital Assets Act provides for the legal regime applicable to fundraising when it qualifies as issuance or private placement.

The following assets are excluded from the application of the Digital Assets Act in terms of issuance:

  • if they are offered free of charge;
  • if they are created automatically by intermediated mining processes in consideration for the maintenance of distributed ledger technology (DLT) or the validation of transactions;
  • if they are unique and not fungible with other digital assets; and
  • if they are financial instruments or electronic money.

Note that all other digital assets are eligible for a licence. In addition to this, the Digital Assets Act states that prior to carrying out an activity, the authority must be consulted as to whether it is licensable or not.

According to the Digital Assets Act, only collective investment undertakings classified as other UCIs may create sub-funds investing in digital assets. Undertakings for collective investment in transferable securities (UCITS) and other UCIs under Andorran law may invest in digital assets issued or marketed in Andorra by the registered entity provided that divestments occur simultaneously for all unitholders and each unitholder is a qualified investor. In addition to this, collective investment undertakings shall manage risks in relation to the valuation of assets, liquidity and safekeeping.

The Digital Assets Act foresees the legal regime applicable to broker-dealers and other financial intermediaries dealing with digital assets.

To this extent, according to this piece of law, brokers act as investment services providers for the purpose of receiving, transmitting and executing client orders in relation to one or more digital asset(s). In return, they receive intermediation for the execution of the purchase or sale. Intermediaries that successively offer or resell the digital assets to third parties will have to carry out this activity in accordance with the initially published White Paper.

The Digital Assets Act in Andorra defines smart contracts as computer programs stored in a DLT system that execute and record results in a distributed ledger. To be legally valid, smart contracts must meet the basic requirements of contracts, including consent, object and consideration, according to Andorran legal doctrine.

According to Article 27.2 of the Digital Assets Act, a smart contract will have legal validity in Andorra if it satisfies the following conditions. It must:

  • operate independently of the software developer;
  • have a tamper-resistant timestamp;
  • ensure the integrity and execution of transaction conditions;
  • be signed using a valid digital form;
  • pertain to transactions conducted within Andorra involving nationals or residents;
  • clearly identify confirming signatures; and
  • involve nodes located and registered in Andorra or are managed by an entity registered in Andorra.

In Andorra, developers of blockchain-based networks or the code that runs on these networks are generally considered service providers rather than fiduciaries.

Liability and responsibility may differ depending on the specific circumstances of each case, so a thorough examination is required to determine the extent of developer accountability for losses resulting from software usage. Therefore, a case-by-case analysis would be necessary to determine the extent of developer responsibility for losses arising from the use of their software.

In Andorra, decentralised finance (“DeFi”) constitutes a licensed activity regulated by the Digital Assets Act. Article 25 of the Digital Assets Act establishes minimum requirements for a platform to operate in Andorra, which will be verified by the AFA beforehand. This includes the application for an activity licence based on the platform’s configuration and process deployment. These activities are considered special activities and are subject to a distinct legal framework that places emphasis on aspects such as registration, authorisation, supervision, monitoring and control.

DeFi activities are regulated under Article 26 of the Digital Assets Act. According to this Article, all entities subject to special regulations must apply for an activity licence following the standard licensing procedure, whenever they are involved in the digital representation of assets. These activities include the following:

  • stablecoin initiatives;
  • commercial crypto lending;
  • flash loans;
  • decentralised exchanges;
  • leveraged arbitrage;
  • market making;
  • atomic swaps;
  • staking or representation-based participation;
  • yield farming or liquidity mining;
  • oracles;
  • insurance services;
  • digital portfolio management;
  • Know Your Customer (KYC) and identity protocols; and
  • automated multi-level investment platforms.

Entities engaging in any of these DeFi activities are required to obtain the necessary licence before the AFA to operate within the regulatory framework established by the Digital Assets Act in Andorra.

In the Andorran legislation, the procedure for taking an effective pledge or security interest (or the equivalent) in digital assets pledged as collateral for a loan has not been specifically developed. In the world of decentralisation, the only activity defined as special is that of commercial crypto loans and flash loans.

However, since this matter has not been developed in Andorran law, the determination of whether it constitutes a “security interest” or a pledge would depend on the specific case. It would be necessary to assess each situation individually to determine the applicability of such concepts. This means that taking a pledge or security interest on digital assets as collateral for a loan in Andorra would require an analysis and interpretation of the law based on the specific circumstances of each case.

In order to operate as a custodian for digital assets in Andorra, the Digital Assets Act requires the implementation of precise protocols addressing security measures, key recovery, asset segregation and contingency plans. Under Article 9 of the Andorran Digital Assets Act, custody and administration of digital assets on behalf of third parties require a specific licence.

The entities providing these services must meet certain requirements and adhere to specified protocols. According to Article 12, firms engaged in digital asset representation must have custody protocols in place to ensure accurate accounting and proper preservation of assets. The custody activities should be functionally independent from the fund, ensuring segregation of digital assets. Additionally, Article 22 defines digital asset custody services as having control over private keys within a cryptographic system. Likewise, custodial entities must comply with AML and CFT regulations, as per the Andorran AML/CFT Act.

A fundamental purpose of blockchain is the impossibility that data can be modified unilaterally, which is known as data immutability. In this sense, the compliance with certain rights recognised by the Andorran regulations on personal data protection is particularly challenging. More precisely, it is complicated to comply with the rights of erasure and the right to limitation of processing:

  • Right of erasure (or “right to be forgotten”): Compliance with this right is not only due to technical or design factors, but also occurs at the organisational level. In this sense, in order to comply with the right to be forgotten, all blockchain participants should proceed to the suppression of the data in their copies of the database.
  • Right to limitation of processing: The immutable nature of the data contained in the blockchain means that it is impossible to enforce this right.

Therefore, the nature of this technology hinders the fulfilment of both rights, which is a direct clash with data protection regulations.

The correct application of data protection regulations to blockchain-based products or services is highly complicated.

As an example of this difficulty, there is the determination of the data controller. Indeed, Andorran data protection regulations revolve around the existence of a data controller before whom the user can exercise his or her rights. However, the decentralised nature of blockchain means that identifying such a controller is not an easy task.

Therefore, the correct application of data protection regulations requires rethinking the design of blockchain technology.

For the purposes of the Digital Assets Act, mining activity is considered to be the carrying out of an activity within a blockchain for the purpose of receiving a fractional reward under a newly created token.

The concept of “cryptocurrency mining facilities” will be developed by regulation but, in any case, any facility that carries out the aforementioned activity and that has a high consumption of electrical energy is considered as such.

The “administrative register of cryptocurrency mining facilities” was created to monitor the activity of cryptocurrency mining facilities from an economic point of view and their impact on operation of the electricity system and compliance with renewable energy targets. This register is telematic, declarative, mandatory and free of charge.

In addition, mining is subject to prior authorisation by the Andorran government, with a prior mandatory report from the electricity system operator.

The Digital Assets Act does not pertain to the issuance of crypto assets that are generated automatically through mining processes as a form of compensation for maintaining the DLT or validating transactions. Furthermore, the act excludes direct and self-mining activities, as well as direct and self-trading of crypto assets with trading platforms or digital asset exchanges, when such activities are the sole focus and no other regulated activities are involved.

The Digital Assets Act does also provide for a definition of “staking”, which is defined as a process of validating transactions on a Proof-of-Stake (PoS) based on the strategy of acquiring cryptocurrencies and keeping them locked in a wallet in order to receive profits, voting rights, interest or rewards, in exchange for contributing to the operability of the blockchain network. The positions are blocked.

“Staking” qualifies as a special activity and triggers licensing requirements.

Andorra has implemented the Digital Assets Act, which provides a legal framework for digital assets, DLT and related activities.

According to the Digital Assets Act, Decentralised Autonomous Organisations (DAOs) are defined as a digital entity that manages assets and operates autonomously in a decentralised system, but relies on tasks of individuals in order to correctly perform certain functions that otherwise could not be done by the automaton.

In terms of governance, where a DAO is not registered in Andorra, the holder of the node within Andorra that enables its deployment as a developer, miner, validator or other function it supports as a node shall be liable for any damage caused in relation to the smart contracts. In the event that the DAO’s governance systems enable smart contracts to be executed in Andorra because there is no node in the country to enable this, they shall have no legal validity or effectiveness within Andorra.

Andorran laws are silent on this particular point. To this extent, users may opt for different governance structures to be used by the DAO.

For the time being, DAOs are not recognised as legal entities in Andorra. The use of governance protocols on a decentralised basis may be adopted by legal entities. However, there are no specific regulations on this particular point.

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Law and Practice


Cases & Lacambra is a client-focused international law firm with a cornerstone financial services practice. With a presence in Europe and America, the firm has a tested track record in complex transactions involving the financial sector, special situations, financial markets regulations, cross-border disputes and transactions with relevant tax aspects. Its financial services group is composed of four partners, two counsels, and three associates, and most of the members of the team have profound knowledge of banking and finance regulations and capital markets transactions. The firm’s practice also extends to include capital markets, derivatives and structured finance matters.

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