Initial coin offerings: key US legal considerations for ICO investors and sponsors
Anthony R.G. Nolan, Edward T. Dartley, Mary Burke Baker, John ReVeal, Judith E. Rinearson · Journal of Investment Compliance · 2018
Purpose To describe several key legal and regulatory considerations for initial coin offering (ICO) issuers and investors seeking to navigate some of the regulatory waters in the rapidly developing space of Bitcoin, Ether, and other cryptocurrencies. Design/methodology/approach Explains securities law, commodities law, tax and anti-money laundering considerations. Introduces the SAFT (Simple Agreement for Future Tokens) and provides a future outlook. Findings The dramatic rise in value of Bitcoin, Ether, and other cryptocurrencies in 2017 generated great interest in initial coin offerings as a new form of financing on the part of both investors and companies seeking to raise funds. At the same time, ICOs raise a myriad of complex legal issues in a rapidly evolving regulatory environment in the United States and around the world. Recent regulatory actions make it more likely that most ICOs will be considered to be securities offerings. Originality/value Practical guidance from experienced finance, investment management, consumer financial service, tax, and payment systems lawyers.