Classification assessment: stages and deadlines
Classification assessment sorts a token into a regulatory category before it is offered to the public or admitted to trading. A straightforward case runs three to five weeks. A token with mixed features, or one that changes function after launch, takes longer. Once a white paper is published, changing the category becomes difficult and costly. That publication date is the point of no return.
What changes once the clock starts
The assessment is an internal step, not a filing. In most cases nobody outside your team reviews it by default, and there is no fixed statutory clock running against you from day one. That does not make the timing optional.
The category the assessment reaches drives every later date. It sets when the white paper can go out, what it must disclose, whether a listing venue will accept the token without further questions, and whether a national supervisor needs anything before trading starts. Move the assessment late in your planning, and every date built on top of it moves with it.
A category reached after marketing has already started cannot be treated as provisional. Once holders, exchanges, or a supervisor have relied on a public statement about the token's function, correcting that statement costs more than getting it right the first time. Treat the memorandum as final from the moment any public document depends on it, not from the moment it feels convenient to finalise.
Steps to take
- Write the functional description. The issuing team sets out, in plain language, what the token does, who can hold it, and how value moves between holders. This description drives every step that follows, so write it before the marketing copy exists.
- Collect the supporting file. The issuing team and counsel gather the draft white paper, any smart contract summary, and prior opinions on comparable instruments. A thin file is the most common cause of delay at the next stage.
- Run the classification test. Counsel maps the functional facts against the available category definitions and lists every borderline feature on its own, rather than folding it into a general description.
- Draft the memorandum. Counsel records the reasoning, the category reached, and the assumptions the reasoning depends on. Assumptions that later prove wrong are the usual reason a classification has to be revisited.
- Obtain sign-off. The person responsible for the issuance — founder, board, or compliance officer — approves the memorandum before any external step is taken, including any informal conversation with a listing venue.
- Freeze the file. The memorandum is dated and stored before drafting of the public white paper begins, so that the reasoning cannot later be read as fitted to the marketing text.
Once the memorandum is signed, keep the file in one place and do not amend it informally once a public document relies on it. See Retention: the report, the extracts and our copy in practice.
Two causes account for most delay at this stage: an incomplete document set at step two, and disagreement among stakeholders about which category the token actually reaches. Both are easier to resolve before sign-off than after.
Who is responsible and how long each stage takes
| Stage | Who is responsible | Typical duration |
|---|---|---|
| Functional description | Issuing team | 3–5 business days |
| Document collection | Issuing team and counsel | 5–10 business days |
| Classification test | Counsel | 5–7 business days |
| Memorandum and sign-off | Counsel and decision-maker | 2–4 business days |
| Total, straightforward case | — | 3–5 weeks |
An informal steer from the national supervisor for the token's home Member State is optional, not a required stage. If you request one, add several weeks to the total. Expect the request to run alongside your internal work rather than before it, since the supervisor's answer usually confirms rather than replaces your own reasoning.
If your situation differs
If the token's function is a plain right to a service, with no expectation of profit, the assessment usually closes at the shorter end of the range, since fewer features need separate testing.
If the same token combines a claim on value with a utility feature, the assessment takes longer, and a second internal review before sign-off is advisable rather than optional.
If a listing venue in another Member State asks for its own classification confirmation, treat that as a parallel track with its own deadline, not as part of your internal timeline. Its answer can arrive before or after yours.
If the token's design changes after the memorandum is signed, even in a detail that seems minor, restart the test for the affected feature rather than amending the existing memorandum. A patched memorandum is harder to defend later than a short new one.
What this page does not cover
This page describes the internal procedure and the order of decisions. It does not classify your token — that depends on facts specific to its design, and no generic description can substitute for that work.
It also does not cover the separate authorisation procedure that may apply to the issuing entity, the ongoing disclosure duties that follow issuance, or the rules governing how the token may be marketed once the category is settled. Each of those runs on its own timeline, built on top of the one described here.
Sources and limits
We reviewed this page on 15 May 2025. It sets out practice rather than a specific legal provision, consistent with the procedural scope of this article.
Classification often depends on facts that sit outside this file. If the counterparty in the deal is registered in Luxembourg, confirm its status before you rely on it in the memorandum: Counterparty in Luxembourg.
If a contract or disclosure document that feeds the assessment sits in Cyprus, check what that document can actually establish before treating it as settled fact: Document in Cyprus.
If the issuing entity or the listing venue is registered in Malta, verify what a jurisdiction file can support before the memorandum relies on it: Jurisdiction in Malta.
Related reading
If the token carries any reserve claim, a parallel file needs to be built alongside the classification memorandum: Reserve evidence and attestation step by step.
FAQ
How long does classification assessment take in practice?
Three to five weeks for a token with one clear function and a complete document set from the start. Add time for every borderline feature the test has to consider, and add several weeks if you request an informal steer from a national supervisor.
Which documents are needed to start?
A draft functional description, the draft white paper or an early outline, any smart contract summary, and prior opinions on comparable instruments if they exist. Missing documents do not stop the process outright; they narrow what the memorandum can safely conclude, and that narrowing should be recorded, not hidden.
What happens if the other side does not respond?
Record the request and the date it was sent, set a follow-up deadline of your own, and proceed on the evidence you already hold, marked in the memorandum as provisional. Revisit the memorandum the moment new facts arrive, and before any public document is allowed to rely on it.
Next step
A suspended licence changes every deadline set out above. If that applies to your issuance, start here: When a licence is suspended pending review in practice.