U.S. Turns the Corner on Security Tokens (STOs)

Congressman Warren Davidson of Ohio (R) began a pivotal process in the cryptocurrency world by writing legislation that will address all of the ambiguity that now exists in the US laws governing tokens.

Everyone knows of the confusion and flaws of the SEC ’s application of regulations created for equity shares being applied to tokens, forcing all coins to be classified as security tokens whether they are actual financial instruments or utility tokens. The enforcement of these regulations can be extremely severe and even criminal. [...] 

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What Are the Steps Required to Launch a Securities Token Offering (STO)?

BrightCOIN outlines the steps involved in launching a security token offering. (STO)

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Is Regulation Hurting Blockchain Innovation in the U.S.?

I with Silicon Valley entrepreneurs every day. Here’s what I’m finding:

Token Offerings are moving out of the U.S. Forward thinking countries like Malta, Switzerland, Germany, France, Australia, and Japan are creating laws enabling utility tokens to be floated in a legally compliant manner.

Here in the USA, there is no utility provision and all token offerings are considered securities. This is hurting our companies and innovation is leaving the US. While we have had successful Reg D 506c token offerings offerings, I am yet to see one successful Reg A+ offering for a blockchain based token sale (successful Reg A+ offerings have mostly been consumer products)

We all hope STOs (Security Token Offering) in US take off and there is promise they might… we’ll have to wait and see. I personally think for STOs to succeed our regulations will have to get a little relaxed. EG- The costing and time required to do a Reg A+ Tier 2 creates a huge friction point for most founders (lawyers charging $100K- $500K to do a Reg A+). If this friction can be reduced, there is more light at the end of the tunnel.

At the end of the day the win happens where the investor wins (No ICO scams)

At present I see a divided world drawing lines between Utility and Security ICOs.

Do ICO or STOs stand the test of time? Who wins? Time will tell…

Vince Mundy

CEO, BrightCOIN

 

NOTE: This article is provided for informational purposes only and should not be construed as legal or tax advice. read more

Can an ICO do token Airdrops to U.S residents?

BrightCOIN’s legal counsel wrote a really good article on the matter. The high-level takeaway is- DO NOT do Airdrops to American residents. Anil Advani from Inventus Law said “Founders, therefore, have to be careful in structuring their Airdrop or free stock giveaway offerings because those will very likely be: (a) treated as issuance of securities; and (b) subject to the Securities Act, and subject to registration or a specific exemption under the Act.” Full article here 

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