> For the complete documentation index, see [llms.txt](https://elevex.gitbook.io/elevex-whitepaper/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://elevex.gitbook.io/elevex-whitepaper/elevex-ecosystem/elevex.ai/regulatory-framework.md).

# Regulatory Framework

**Elevex** operates within a legally compliant framework by leveraging exemptions under the **Prospectus Regulation (Regulation (EU) 2017/1129)** and other applicable European laws. This approach enables Elevex to facilitate fundraising activities for real estate developers without requiring a full prospectus, while ensuring compliance with investor protection and disclosure requirements.

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#### **Fundraising Framework and Prospectus Exemptions**

Elevex provides a platform for real estate developers to tokenize revenue-sharing agreements and raise funds through a structure that adheres to the following regulatory exemptions:

1. **Prospectus Exemption Threshold**:
   * In accordance with **Article 1(3) and Article 3(2) of the Prospectus Regulation**, Elevex facilitates fundraising through SPVs that issue security tokens representing revenue-sharing agreements. These offerings comply with the exemption for total fundraising **below €8 million over a rolling 12-month period**.
2. **Investor Participation Limits**:
   * Under the Prospectus Regulation, Elevex structures offerings to include:
     * Up to **150 non-qualified (retail) investors per EEA country**, alongside unlimited qualified investors.
   * This structure avoids triggering the obligation to publish an approved prospectus while allowing broader participation.
3. **SPV-Based Issuance Model**:
   * Each real estate project is managed through a **dedicated Special Purpose Vehicle (SPV)**. The SPV acts as the issuer of the tokenized securities, enabling compliance with regulatory thresholds while offering investors direct exposure to project-specific agreements.

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#### **AML/KYC and Investor Onboarding**

1. **AML/KYC Compliance**:
   * Elevex ensures that all investors undergo comprehensive **AML (Anti-Money Laundering)** and **KYC (Know Your Customer)** checks before participating in any offerings, in accordance with applicable EU directives.
2. **Transparent Investor Disclosures**:
   * All offerings include detailed **Key Information Documents (KID)** under **Regulation (EU) 1286/2014** (PRIIPs), providing retail investors with the necessary information to make informed investment decisions.

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#### **Custody and Currency Conversion**

1. **Custody and Currency Services via EU-Licensed Partner**:
   * Elevex collaborates with an **EU-licensed partner** for custody and fiat-to-crypto conversion services. These services are provided under the partner’s regulatory framework and licensing, ensuring compliance with European financial regulations.
2. **Platform Role**:
   * Elevex itself does not provide custody or currency conversion services. Instead, its role is limited to facilitating the issuance and fundraising process.

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#### **Key Features of the Elevex Approach**

* **Regulatory Compliance**:
  * Adheres to **Prospectus Regulation exemptions** for public offers, enabling fundraising without an approved prospectus.
* **Investor Inclusivity**:
  * Combines access for both retail and qualified investors while maintaining compliance with investor limits.
* **Streamlined Fundraising**:
  * Utilizes SPVs to manage individual projects and ensure regulatory thresholds are met for each offering.
* **Transparent Information**:
  * Provides retail investors with **Key Information Documents (KID)** for clarity and risk disclosure.

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#### **Conclusion**

Elevex is structured to enable compliant fundraising for real estate developers while leveraging prospectus exemptions and collaborating with EU-licensed partners for custody and currency conversion. This approach ensures seamless operations while maintaining transparency, security, and legal compliance for both developers and investors.