Some national regulatory organizations have called for cryptocurrencies, ICOs, pre-sales and blockchain tokens to self regulate. This is our best attempt to comply with the spirit of these requests even though formal compliance with international regulations is not yet possible for blockchain tokens.
This paper is specific to our token and organization’s principles. This is not a response from the crypto-community at large or applicable to any token’s except for our own. We will consult with proper legal to see if our DAO can reasonably exist and function in the world under these principled responses to regulatory concern
This is not an attempt for fortunes to be made for the token holders or for the organization’s team members.
That shall be the obvious statement we set forth to establish a reasonably founded and successful organization and token.
Note: We are not aware of any current laws making this offering illegal.
Even though a DAO like this one can not comply with current international investment regulations. We believe it can and should comply with the spirit of the main-street investor protections that those regulatory agencies attempt to deliver, as a sign of good faith.
We do not know if this token is legal in all jurisdictions but we believe it should be. We are not sure if we are subject to regulation, but we believe because many people see it as an investment it should make a clear attempt to protect its token holders with whatever the common best practices in this era become. However we believe an attempt to classify it as a security, stock, currency, asset etc. is ineffective. However under good faith we will agree throughout this document that many people see it as an “asset”. A goal we will establish is trying to establish an appropriate level of funding for the team to operate that token purchasers are comfortable with, and making that information clearly available
We are not aware of any license that exist for blockchain tokens, we acknowledge that no blockchain has ever qualified as a formal asset, currency, common stock, or any other previously defined concept under your current jurisdiction. Again, we acknowledge however that people will see this particular product as an “asset” that people will either feel they should, or should not acquire. Similar to how some people buy gold coins as opposed to how some people buy gold futures contracts. We understand the thing interpreted as an “asset” is digital code not a physical coin. Perhaps current law should advance to include such “assets” as its undeniable they exist and are viewed that way.
The trading market for this token is designed to deliver at least 99% of the value to the investor and 1% or less to the team, we believe this is fair. The prices of this token are specifically designed to prevent manipulation in house through means of transparency. However just like any other industry in the world, any entity risks dealing with unscrupulous characters. We will attempt to follow industry best practices for choosing the fairness of any other cryptocurrencies we associate with as opposed to generic metrics or algorithms. However no one can guarantee that people will not attempt to manipulate any market no matter what standards are set forth. We believe the openness and transparency of a public blockchain ledger offers many of these protections as well.
Our tokens can be redeemed with the same tokens used to acquire them at any time via the same process and interface used to purchase them. Our token will utilize industry best practices for securing token holders access to their own personal tokens against theft. We will protect main street “token holders” by delivering transparency and also the reasonable attempts to keep costs in line with other similar industries they interact with, specifically in regards to the way they deal with an “asset” purchase because we acknowledge many purchasers see this as an “asset” acquisition they are making.
Cryptocurrencies are not enemies of market professionals, but we specifically do not offer them special deals, that are not available to the public. However we have tried to establish this token along the same standards of investments they would be comfortable with, adapted to the unique community of tokens. Although it is impossible to link the two as one-in-the-same in legal sense or follow exact guidelines set forth for any traditional asset class because of their uniqueness.
We are a different type of asset that isn’t purchased under conventional means, because conventional acceptance on a international level has not occurred yet. But blockchain has built in protections. And our goals are one in the same. We also believe we should attempt to utilize industry best practices for security of the token holder’s access to their funds, (or “passwords”) and also to protect our own websites and interface. With respect, we believe many people think blockchain security is better than your traditional markets. We have as many aspects to prevent fraud as can be implemented at each layer of our underlying platform.
This token is not interested in becoming a security traded on your exchanges. Surprisingly we do specifically aim to be an exchange traded token, but not on your exchanges and not US or any fiat dollars. I feel that point is lost sometimes, our foundation is not interested in US Dollars. But will do our best to treat anyone who used US Dollars in any way to get involved, without our knowledge, with the methods described in this paper and in our whitepaper. We would welcome you to read it. However I believe a new list of requirements, specific to tokens and unique from assets and securities, to register with the SEC would be welcomed by many.
Our tokens do not guarantee returns. And take considerable measure to make token purchasers aware of the risk of total loss of investment. This organization aims to use best practices to generate stable value in a new sector. These results are not guaranteed and there are not significant advantages for early adapters, you can invest in and out of this fund at any time. Our tokens are held oversees in secure storage wallets using current best practices and our organization complies with the laws of the country in which we reside.
Our pre-sale will be set up to fund the minimum initial startup costs, just like any other type of organization solicits start-up funding and must attempt to use it responsibly. During our pre-sale token purchaser will receive an actual functioning token, it is not simply a guarantee of future results. We feel security law does not specifically cover cryptocurrencies or pre-sales, especially those that deliver an actual token as opposed to speculation in an idea. We feel our token purchasers believe they are acquiring something much more similar to an asset. We are not interested in becoming securities, and we are not interested in being sold by brokers or wall street exchanges, we don’t allow people to use fiat currency to acquire our tokens and we won’t be giving them fiat currency if they wish to exchange their token back to us.
We acknowledge the underlying point that many people are purchasing this token under the assumption it is an asset, we do not acknowledge it as a security and have none of the traditional aspects of a security most importantly including the fact that this organization does not deal with US Dollars.
We do not feel securities laws are designed to, or capable of regulating these types of tokens. But we do agree with your premise that purchasers of a blockchain entry on a distributed ledger should be given the same regard and transparency if not better than purchasing corporate interest recorded in a central ledger.
We do not feel our token falls under that category in any way. But, yes, some hypothetical and currently existing tokens definitely could sound very much like a security. We believe certain tokens will sound like some of these words and some will be more along the lines of one type than the other, security, asset, investment, but it really is different and if we try to simply cram it into an existing category it will never work. For a reasonable future where the two participate together the SEC would likely have to have new definitions for pre-sales, tokens, establish categories and a way for everyone to know what their token was classified as. It is our opinion that the industry isn’t quite there yet, and we are not interested in becoming part of your US Dollar financial system.
We hear your call and this is our best attempt to offer the best investor protections we can offer alongside the principle motivation for why you have registration. But with respect, we are not interested in being sold in your markets or for your dollars. We will try to offer our purchasers terms that most of the world would consider fair and honest. At least until these two communities further integrate this is the best we can offer. We are not looking for approval from your organization. Just letting you know we heard you at the congressional hearing, this is again our best attempt to comply
We do not feel current security laws properly address blockchain entities and tokens. We will attempt to establish a token that is not thinly traded and is less volatile than the market as a whole. We will also use at least 99% of token holder’s funds to purchase the underlying token assets. This is the best method we could achieve to avoid “pump and dump” and establish the most stable token we could. We feel it is more than adequate at complying with the spirit of this request.
We believe a shift in thinking is needed here. Token holders are purchasing what they consider to be the “physical” object that they want (even though the object is code). This is different than purchasing a security. We firmly believe our purchasers identify our product as more of an “asset” than a security.
This statement operates under the premise that a cryptocurrency tied to one or more other cryptocurrencies are sold in a fashion that is similar to a security. This token is not sold or marketed using any of the conventional structure of “wall street” and our potential token holders see themselves as acquiring an asset from us. We don’t intend on becoming securities on your exchanges, nor do we intend on using your US Dollars.
We have no brokers dealers or investment managers token purchasers elect a foundation to handle running of the day-to-day operations, that’s it, there is no one else. We are aware that any cryptocurrency would fail registration with securities law, and that is part of the reason we are not interested in operating within your financial jurisdiction. However, we understand you are just doing your jobs by issuing this document, we feel it was in good spirit and this is our best attempt to respond in good spirit to this letter.
We do accept Ethereum token as a means to acquire our token. Our Token is never available to be purchased on margin or with credit or with fiat currency. Our cryptocurrency is not designed to provide any capabilities for money laundering. And does not deal in US Dollars. Our ledgers are public so wallet addresses and associated transactions can be viewed by anyone. Our token will never allow people to transfer it for USD or fiat currency of any kind. There is no value in it for money laundering, people who launder money need to be able to buy or sell something for fiat currency, we offer neither. In our opinion know your customer laws apply to the purchase of securities, or any other means of transferring US Dollars or other .fiat currencies. We will never take part in helping people transfer fiat currency in any way. It is our opinion that money laundering must be stopped at the gate from fiat to tokens and there are already a few established companies that provide that service according to all the know your customer regulations. We are not interested in the business of moving or handling USD or fiat currency. We have no desire to know our customers personal information or scan their IDs, we would consider that a security nightmare.
This is the part no one likes to talk about. We believe if you acquire 10 of our tokens with Ethereum you should record the amount you spent simply because its good practice. If you later sell 10 tokens for more than the original amount of Ethereum you used to acquire it and then convert that Ethereum to fiat currency in the country in which you reside, you should pay applicable taxes just like if you purchase 10 gold coins and sell them for more later. We also believe if you sell it for less you should be able to write the reduction in value of the tokens as a loss. The best we can do is make honest reports available to token holders so if they do happen to live in the United States and did use US Dollars in a transaction previous to or after their asset exchanges with us, and unbeknownst to us, they would certainly be capable of providing a quantifiable report identifying “gains” or “losses” in asset value.
Although the phrase cryptocurrency includes the word currency we believe there is a distinct difference between the two possible analogies, cash and gold, and we believe we are more similar to the latter. Currency implies ability to use for payment, we do not offer that capability. We utilize self-oversight and community regulation, our underlying foundation also operates within all applicable laws of the government and the country in which we reside. But it is true that we are not interested in using US Dollars, or participating in US Market Exchanges.
To acquire our token you must already have other tokens, meaning your “acquisition” is not made with any country or government’s fiat currency, we do not believe we provide any value to money launderers. But if the SEC wanted to regard tokens as something new and different from a security or an asset or a currency just like this community views it as something different. We believe there is room for a conversation.
Our token and foundation will never accept any USD, Euro, Yen or other fiat currencies. Again don’t lose site of the fact that most of us are not interested in your financial system, you are more interested in us than we are of you. But we acknowledge that you initiated a responsible dialogue.
As stated previously we do accept Ethereum. Without any disrespect, however, we disagree that the SEC is necessarily required to extend their oversite to every token to token transfer that occurs on earth. It would be a monumental task. A focus on the tokens transfers from token to fiat, specifically US Dollars, does make sense. However as cryptocurrencies continue to grow, the manpower required to oversee and regulate worldwide token to token transfers would be all but impossible.
Our structure does allow token holder to manage a fund that holds other cryptocurrencies
we never extend credit to our customers in any way shape or form and discourage this practice.
We do not believe the market participants have been given clear enough instructions to make this determination. We do not feel the existing rules for securities or for assets properly cover tokens. However we do not believe our token is a security, with an important distinction, it does not raise the amount of USD or Tokens that you hold. Is not the only appeal and exact purpose of a security to increase its USD value which it can be traded for. This token cannot be traded for fiat currency.
We will deliver a working product, not a yet to come product, during our PRE-SALE. And would explain risks to anyone who invests pre-PRE-SALE using best industry practices available. We have made every attempt to ensure this token holds the same value in any market in which someone may wish to acquire it. In fact it is specifically designed not to have a higher price in the secondary market
Tokens can always be redeemed or acquired with Ethereum through our application, we expect this value to remain universal and token purchasers are unlikely to trade it at a value above current market value of the underlying assets of the foundation. And no second market is necessary, our tokens will be backed up by the actual fund, they can easily be redeemed in the primary market at any time for fair value.
We agree that all token holders deserve to know what they types of tokens the foundation holds and how the foundation operates, who the members are, and what those members are tasked with providing to the token purchasers, and yes most importantly to the relevant risks involved with the underlying foundation assets.
The laws were not meant for this new emerging industry. They must be updated to reflect the fact that in reality a blockchain token, is not a security and it is not a traditional asset and it is not a currency. It is its own thing, a blockchain token, that is why people want to have them, it is new, it is different from the way any of the other securities or assets exist in the whole world, the laws to govern it should be different as well
We hear your request.