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Crowdfunding an ICO Without Getting In Trouble

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Kendall Almerico
CSWGlobal18 presentation

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Crowdfunding an ICO Without Getting In Trouble

  1. 1. Kendall AlmericoKendall Almerico ““One of the top Crowdfunding & JOBS Act attorneys in the countryOne of the top Crowdfunding & JOBS Act attorneys in the country”” CROWDFUNDING AN ICO WITHOUT GETTING IN TROUBLE
  2. 2. “Top Crowdfunding Expert Every Startup Needs To Know” “One of the Top Crowdfunding Attorneys in the Country” “Number One Crowdfunding Influencer In The World” One of the Most Influential Leaders in Crowdfunding
  3. 3. Quoted and interviewed in USA Today, Washington Post, Forbes, Bloomberg, CNN, Huffington Post, Fox Business News, New York Daily News, and more. Attorney with 30 years experience starting and growing businesses, raising capital and getting products to the market Wrote about Crowdfunding for Entrepreneur.com Kendall Almerico
  4. 4. 2017 Initial Coin Offerings: Minting Money Like Magic! 2017: $5 billion in new capital from just over 700 ICOs! Raise capital online through a form of crowdfunding without giving away any equity in your company by selling a cryptocurrency or token! Sell to anyone – not just accredited investors and accept Bitcoin as payment! No rules or regulations. Just set up a website and get rich!
  5. 5. Oops! We “Forgot” To Follow Securities Laws "I believe every ICO I've seen is a security" SEC Chairman Jay Clayton SEC has issued numerous subpoenas State regulators have filed charges Class action lawsuits have been filed SEC has hundreds of ICOs on their radar
  6. 6. 2018: It Hasn’t Stopped! “Crypto Market Sees ICOs Raise Over $1.5 Billion in June 2018” Last week: “Record-Breaking ICO Rakes in $30 Million in Two Hours”
  7. 7. A Closer Look At The “Record Breaker” “One of the worlds largest cryptocurrency mining pools” “There are concerns that VIAT could be an unregistered security per China’s securities laws”  “ViaBTC has a substantial connection to Bitmain. Bitmain has already been outed for questionable financial stability and, possibly, illegal activity—it announced that it was backed by several banks when it wasn’t and, according to internal documents, lied about its finances to investors“
  8. 8. Equity Crowdfunding To The Rescue! An ICO may use the JOBS Act - Regulation A+, Regulation D and Regulation CF to raise capital online by selling equity Must treat the token sold as a security and follow federal and state law Because of the prior unregulated sales and possible fraud – doing an ICO is still very risky without proper legal and regulatory guidance
  9. 9. 5 Rules For ICO Crowdfunding Success
  10. 10. Rule #1 Do You Really Need Blockchain?
  11. 11. Blockchain is great, but it’s not needed in every business Do You Really Need Blockchain? If you want the backing of the crypto community, you better have a legitimate use of blockchain
  12. 12. Rule #2 If America Is Involved, Follow Securities Laws
  13. 13. BUT… …I’m using a SAFT …I’m following Howey …I’m not selling equity …Ether is not a security …I have a utility token If America Is Involved, Follow Securities Laws
  14. 14. Rule #3 There Are A LOT Of Rules To Follow
  15. 15. SEC IRS CFTC FINCEN TREASURY DEPARTMENT STATE REGULATORS There Are A LOT Of Rules To Follow
  16. 16. Rule #4 Protect Investors ( i.e. Tell The Truth)
  17. 17. Protect Investors ( i.e. Tell The Truth) For example… Don’t pretend a Supreme Court Justice is on your legal team.
  18. 18. Rule #5 It’s Not Going To Be Quick, Or Cheap
  19. 19. Plan to spend several months and a lot of money to get the SEC to allow you to raise capital in a legal and compliant manner. But… It’s worth it. It’s Not Going To Be Quick, Or Cheap
  20. 20. Kendall’s Final Words Until he starts talking again…
  21. 21. Kendall@BankRoll.Venture s @KendallAlmerico www.Almerico.com www.BankRoll.Ventures Kendall Almerico www.DiMuro.com

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