Cryptocurrency Investors from U.S. Can Take Part in ICOs Legally
The dance of crypto-regulations and the digital currency community is going on still to this day. What made it the worst is the anticipation of regulation, even worse than the regulation itself. With no information what the to-be rules are, the first and safest thing to do is wait for the worst.
However, there are various forms of Initial Coin Offerings that are legal in the U.S., and that not only for accredited investors but also for anybody that wants to step in.
The registration process of a securities offering is quite an expensive deal to take care of and not so easy for those not accredited investors.
One company, however, is trying to take the headache out of the registration process. Republic, which calls itself “the Amazon of private investing,” has developed an SEC-compliant fundraising model that allows their clients to make worry-free offerings to all clients—of any income level.
The SEC exemption the the Republic reaches for is for online crowdfunding.
The crowdfunding must be: “online through an SEC-registered intermediary, either a broker-dealer or a funding portal permit a company, and the raised funds cannot exceed $1,070,000 per year.”
There are no limits to which investors can step in, but there are borders for how much they can add up. Investments are issued in “Token DPA’s” — debts payable by assets, Republic’s alternative to SAFTs. Unlike SAFTs, Token DPA’s come with obligations of payment.
“It is structured as debt to the project and a loan from participants,” Republic stated in an emailed statement. These tokens can also include escrow provisions, to “guarantee investors funds are used responsibly.”
Even that the word letters ICO or Initial Coin Offering could be none existent on their site, the concept and idea behind it is very similar. What makes them different is:
“When you invest on Republic you receive a financial stake in the company in the form of a security.”
For the traders that are after the quick-investing-make-money deal there is one condition that could be a dealbreaker:
“It is important to understand that as holders of a Token DPA, there are substantial restrictions on resale and trade during the first year of ownership, with few exceptions.”