Drafting of Privacy Policy for Blockchain Companies

Importance of Privacy Policy

Privacy policy is important for websites and mobile apps, be it selling online goods or issuing cryptocurrency tokens. A website privacy policy is an important document that outlines how a business or organization deals with any information that it gathers. It needs to clearly show the purpose of the collecting data, such as a website visitor’s name, email address, etc. If personal data is to be stored on a website (including cookies), this needs to be defined alongside details on whether or not the user’s personal data will be stored on an unsecured server-based system, or if the user is required to provide their own security details.

Additionally, a website privacy policy may also need to outline the penalties that can be incurred if data is collected and used without the individual’s knowledge or consent. Some websites such as Google, attempt to minimize the risk of data collection through automated decision-making by offering a choice for users to enable or disable certain aspects of automated decision-making on certain types of queries.

However, this does not extend to personal data. It is important that the website privacy policy clearly specifies which areas are automated and which are not. In addition, it is imperative that these areas are clearly defined in the terms and conditions as well as the Data Protection laws. The wording within a website privacy policy can often be more important than the contents of the policy itself, as these can potentially place a burden on data protection laws, specifically when it comes to selling of utility tokens via ICO or an Initial Coin Offering.

It is also vital that the wording of the data protection section of a website privacy policy is specific as to what types of personal data it will cover, and what it does not cover. Finally, it is essential that any restrictions or stipulations mentioned in the data protection section of a website privacy policy are highlighted and explained in this manner as well. This ensures that both the website owner and their customers understand exactly what is covered and not covered by their website data protection policy and the associated terms and conditions that are drafted along with writing of legal opinion for utility tokens.

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ICO Privacy Policy

Since Initial Coin Offerings are new in the market, the general public is still not aware of certain aspects of their functionality. Since this currency offering is a classification of funding that specifically utilizes cryptocurrencies, ICO enterprises use their Privacy Policy to specify the way they collect and use Data from their Users. A privacy policy gives Users specific legal protection by plainly revealing how the entity will regulate and safeguard user data. When gathering or utilizing personal data from Users, the enterprise must provide Users with a link to their privacy policy. A company’s Terms of Use must also contain a link to their privacy policy to strengthen the likelihoods that Users will examine it.

Drafting of a Privacy Policy

A privacy policy is a required part of any ICO website as it clarifies the views and procedures of the company for the data they obtain from Users. Although this policy is a formal document, the companies must guarantee that the summary is meticulous and susceptible to the User as they are most implicated by it. The important portions of this document include:

Introduction: Here the User is informed about the background of the enterprise and other data associated with the ICO and its functionality. Any terms related to the compilation of data from Users must be specifically presented. The introduction is a bridge between the User’s knowledge of the concept and the valid terms which must follow.

Information Collected: Here the user is informed of the type of information collected by the website. While the information must be provided, the policy identifies the kind of data the User must oblige. Thus, the drafter must illustrate the nature of data accumulated, information on server identification, hostname and IP address tracking, and data storage.

Collection: Here the User must be informed of the techniques used to gather the data. The quality of the technique, whether it is physical or automatic, and how it is processed, allows the user to have a better impression of how his data will be gathered and preserved.

Storage: If the database used by the company to compile the data is established offshore, then the company must register in that country after adopting its privacy laws. If the company’s database is in India, special authorization is needed to disseminate data outside the nation, even if its objective is justified. Users of the website must be satisfied that the company is making every effort to preserve their data.

Thus, for any company that intends to launch ICO exchanges on websites for people to invest in the same, their privacy policy must encompass all reasonable privacy implications and edit the policy as and when expected. While Cloud computing provides organizations with quick access to different kinds of data, it also increases the privacy principles that they must regulate. Copyright laws may also influence the privacy policies and hence all inputs scrutinizing the infringement of copyright must be noted. Privacy in business includes not only safeguarding data related to users but is also is a responsibility that every company, must attempt.

Writing Privacy Policy Document

Privacy Policies are an essential component of carrying out any business online. This is especially important for enterprises and websites that offer ICO services and engage users for token exchange. If an organization has patrons or employees, then there ensues a requirement to safeguard personal data that it may amass from them. Laws require that the company secure such data, leading to the importance of a Privacy Policy. The policies must protect both online and offline usage of personal data as each of these procedures have their obstacles.

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Advocate Rahul Dev is a Patent Attorney & International Business Lawyer practicing Technology, Intellectual Property & Corporate Laws. He is reachable at rd (at) patentbusinesslawyer (dot) com & @rdpatentlawyer on Twitter.

Quoted in and contributed to 50+ national & international publications (Bloomberg, FirstPost, SwissInfo, Outlook Money, Yahoo News, Times of India, Economic Times, Business Standard, Quartz, Global Legal Post, International Bar Association, LawAsia, BioSpectrum Asia, Digital News Asia, e27, Leaders Speak, Entrepreneur India, VCCircle, AutoTech).

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