When the contract has no upgrade path: what to do first
When a tokenised rights contract has no upgrade mechanism, the first step is not technical. Freeze the record: capture the current state of the token, its metadata, and the off-chain agreement it references. Then identify which obligations under Regulation (EU) 2023/1114 (MiCA) still run against the issuer, regardless of the contract's design.
Legal basis
Regulation (EU) 2023/1114 (MiCA) sets duties for issuers and crypto-asset service providers that exist independently of the smart contract's code. A missing upgrade path does not suspend the white paper, the ongoing disclosure duty, or the complaints-handling requirement. These duties took effect from 30 December 2024 and apply on their own calendar, not on the calendar the contract happens to allow.
Where the tokenised right also moves value between wallets, Regulation (EU) 2023/1113 (TFR) attaches information duties to the transfer itself. Those duties are separate from the token's programmability. A contract that cannot be patched has no bearing on whether the transfer carried the required originator and beneficiary information.
Practical consequence
Two clocks keep running whether or not the contract can be amended. The issuer's disclosure and complaints obligations under MiCA continue on their own schedule. Any transfer that moves the asset still carries the information duties required by the TFR. A related edge case, where the underlying value itself is disputed rather than the contract's flexibility, is examined in When a stablecoin peg is challenged in practice.
The practical risk is not that the contract stays static. The risk is that a party treats the absence of an upgrade path as a reason to delay checking whether disclosure or transfer-information duties were already breached. They were, or were not, on the day the transfer happened. That fact does not wait for a technical fix.
What to do first
- Instruct counsel to preserve a timestamped snapshot of the on-chain state and the linked metadata before any further transfer takes place.
- Pull the issuer's white paper and any amendments filed under MiCA; compare them against what the contract actually does today.
- Check whether the transfer that triggered the dispute carried the originator and beneficiary data required by the TFR. Missing data is itself a fact, not a gap to explain away.
- List every wallet and counterparty involved, in order, with dates. This sequence becomes the evidentiary chain.
- Route the file to the forum with jurisdiction over the underlying agreement, not to the chain's technical documentation.
- Set an internal deadline for a written position before the counterparty's own deadline expires.
Who decides
The forum depends on which question is being asked. A single dispute often raises more than one of these questions at once.
| Question | Forum | Basis |
|---|---|---|
| Whether the issuer's disclosure duties were met | Competent authority in the issuer's home Member State | Regulation (EU) 2023/1114 (MiCA) |
| Whether transfer information was complete | Provider's own competent authority | Regulation (EU) 2023/1113 (TFR) |
| Whether the underlying contract's terms were breached | Forum agreed in the off-chain agreement, or courts with jurisdiction over the parties | The agreement itself |
Note the last row carries no EU act as its basis. A breach of contract terms is decided under the agreement's own governing law, not under MiCA or the TFR.
Forks
If the counterparty is also the issuer under MiCA, the same file should identify which of its ongoing disclosure duties bear on the dispute, separately from the contract claim itself.
If the transfer already happened without complete originator and beneficiary information under the TFR, that gap is evidence in its own right, not a compliance footnote to raise later.
If the underlying agreement is silent on both upgrades and dispute forum, the default is the courts of the country whose law governs the agreement — a question the contract's code cannot answer, however it was written.
A related pattern, where the dispute starts from a contradiction rather than a missing feature, is set out in When an off-chain agreement contradicts metadata: what to do.
Limits of this page
This page does not tell you what can be established once you have decided whom to pursue or how to frame a claim. When the underlying dispute also touches an asset located outside the digital layer, Asset in Spain and its limits sets out what a registry search can and cannot confirm.
When the counterparty's obligation is a stream of payments rather than a single disputed transfer, the pattern is closer to Debtor report when royalties stop: what to do first.
Where the file needs building rather than reading, Build your report and what to prepare sets out what to gather before instructing us. This page also does not perform on-chain forensics and does not price a claim.
Verified
Last checked: 04 June 2025. Primary sources: Regulation (EU) 2023/1114 of the European Parliament and of the Council of 31 May 2023 on markets in crypto-assets; Regulation (EU) 2023/1113 on information accompanying transfers of funds and certain crypto-assets.
FAQ
What is the first step when the contract has no upgrade path?
Freeze the on-chain state and the linked metadata before any further transfer. Only then compare the issuer's MiCA disclosure duties against what the contract currently does.
Which deadline is already running?
The issuer's disclosure and complaints-handling duties under MiCA run on their own calendar, independent of the contract's design. Any transfer already made carries TFR information duties that do not pause either.
Who decides, and on what evidence?
It depends on the question. Compliance with MiCA or TFR duties sits with the relevant competent authority. A breach of the underlying agreement sits with the forum that agreement names, or the courts with jurisdiction over the parties.