The snark of the crowd
Part of the whole point of crowdfunding is that you leverage the “wisdom of the crowd.” That is, a start-up company presents the relevant information about its idea, its team, and its financials to the crowd, and the crowd weighs in with questions and commentary. The crowd may ask about the company’s competitors, challenge the […]
Pumpkin Spice Blockchain
Well, actually nothing of the sort, but did I get your attention? The SEC is continuing to bring suit against ICO scammers. This one got my attention because (a) the scammers stuck the SEC seal on their website and tried to make out that they were a regulated entity and (b) said they could sell under Regulation […]
ICOs and when “KYC/AML” isn’t actually KYC/AML
We are seeing a lot of references to KYC/AML in the ICO/STO space. Lots of shops include this function as part of their pitch to create smart contracts and host the offering on their platform. The problem is that what they are doing in most cases isn’t actually KYC/AML and this could lead to confusion […]
It’s so hard to say goodbye
Early-stage companies often fail. They often get acquired, too, sometimes in distressed circumstances and sometimes in circumstances leading to Lambos all round (most often the former). Companies who have raised funds under Reg A and Reg CF are no exceptions. Unlike companies that made only private offerings to investors, companies that have made Reg A or […]
The morphing of securities tokens
I’ve never been a fan of the “the SAFT is a security but the token isn’t” theory. As a refresher, the Simple Agreement for Future Tokens (“SAFT”) is an investment contract where funds will be used by the issuer to develop its blockchain platform and issue digital tokens that can be used on that platform […]
Regulation CF annual filing season starts off batting .200
As of Friday night, when the SEC’s EDGAR system went to bed, there had been 61 filings of Form C-AR made (with the rest due Monday for all companies with a 12/31 fiscal year-end). This is the form that companies have to file to keep their investors updated when they have sold securities under Regulation […]
The metaphysics of the second step
No, not a novel by Gabriel Garcia Marquez, but some musings on an aspect of the more complicated aspects of securities law relating to what needs to be registered under the Securities Act of 1933, part of what we law bores refer to as “the metaphysics.” Some investments happen in two stages. You buy convertible […]
ICO bounty programs
We keep saying that ICOs have not changed the securities laws and there’s no real magic to how to apply existing securities laws to ICOs. We are sure you’ve read our memo on the topic. That’s certainly true when it comes to “bounty” or referral programs in the ICO space. In these programs, people get coin or […]
ICOs and liquidity for founders in secondary trading?
Here’s another issue addressed in our ever-expanding memo on the securities laws raised by ICOs. Some founders and company insiders, including those who got their securities in “pre-sales,” may want to resell their tokens when secondary trading starts. Hold up there, Skippy. You may wish to consider a couple of things before you do that. First, might […]
ICOs and Section 12(g): Yes, our securities laws are harshing the beauty of the blockchain
(This is the first of what will be a series of blogs addressing ICO offerings made in compliance with securities laws. Click here to view our memo that will cover the topic more extensively.) CrowdCheck is working on a Regulation A ICO. That means we are in effect trying to push a five-dimensional square peg into a two-dimensional […]