INITIAL COIN OFFERING (ICO) | Marc Cunningham LLC

Finance (Initial Coin Offering - ICO)

Consultation for initial coin offerings (ICOs) – also called token generation events (TGEs) – security token offerings (STOs) and utility token offerings (UTOs), initial exchange offerings (IEOs) and for tokenized funds.

Consultation regarding various strategies (such as static, dynamic goal, dynamic supply) for structuring an ICO for compliance with Regulation A (exempted public offerings), Regulation D (U.S. private placements), Regulation S (offshore U.S. sales), and registered public offerings.

Drafting and review of AML manual, copy for websites and marketing materials including social media campaigns, data privacy policy, exchange applications, ICO Terms and Conditions for utility tokens, information memorandum, legal offering documents, limited liability company operating agreements, mining agreements, pre-sale Agreement for TGEs, private placement memorandum (PPO), prospectus, purchase agreements, questionnaires (such as accredited investor, bad actor), SEC Regulation A+ Registration Statement, securities token purchase or subscription agreements, simple agreement for future tokens (SAFT), terms and conditions, token offering memorandum (Regulation D), Form C (Regulation CF), or Form 1-A (Regulation A), virtual exchange applications, white papers.

Compliance with the Commodities Exchange Act (CEA) and Commodities Futures Trading Commission (CFTC).

Typical ICO tasks, such as assistance contacting primary and secondary markets to establish liquidity for the ICO, compliance (BSA, KYC), corporate formation and governance, filing and correspondence with the appropriate federal agencies (CFTC, FINRA, NFA, SEC), preparation of the privacy policy, preparation of the prospectus and the terms and conditions, review of advertising and marketing materials, whitepaper review.

Consultation regarding accredited investor offerings under SEC Regulation D Rule 506(c), token and cryptocurrency trading platforms, general crypto derivatives, swap execution facilities (SEFs), broker-dealers of security tokens, alternative trading systems (ATSs) under the Securities Exchange Act, registered business development companies (BDCs) for investment in ICOs and ICO pre-sales.

Comprehensive analysis of a proposed offering under current and proposed U.S. securities laws and court cases.

Structuring advice depending on nature of the proposed ICO, IEO, STO or UTO to determine whether there is a securities element as opposed to a straightforward utility token.

Consultation for tokenized asset offerings (TAOs) issuing blockchain tokens – security tokens – that digitally represent a pool of tangible and real traded assets.

Determination and analysis for the characterization of a token as either a utility token or a security token (using industry standards such as the Howey Test, Family Resemblance Test, Risk Capital Test, and relevant court law).

Analysis of the possible impacts to a proposed offering from other current legislation applicable to the offering (including data protection, GDPR, consumer protection, FIA, e-money license).

Consultation for the establishment of investment funds and collective investment structures, including hybrid structures combining a token issuer with offshore limited partnership (LP) or limited liability company (LLC) fund vehicles.

Consultation for fund managers regarding general fund structure matters, such as appropriate risk disclosures, liquidity terms, manager compensation, side letters, with attention to the continuing evolution of the cryptocurrency space.

Provides litigation alternative solutions available (including ADR and settlement options), estimated costs, possibilities of success, risk assessments, scope and nature of risks, and valuation of various potential outcomes.

Consultation for a seed investment in an international money transfer company that uses Bitcoin and mobile wallets to receive remittances from overseas, and for a Series A investment in a bitcoin wallet company.

Consultation for a Bitcoin platform that allows debit card use for Bitcoin withdrawals and provides a secure vault of institutional investors to store Bitcoin.

Last updated 200518_1757