On the October 8th, 2017, Protocol Labs_, a research, development, and deployment lab for network protocols,_ out of publishes a White Paper in collaboration with Cooley LLP releases the white paper called “The SAFT Project: Toward a Compliant Token Sale Framework”.
Founded by Juan Benet, the man behind the IPFS and Filecoin, Protocol Lab’s new White Paper seems to be the cornerstone of the new venture called the Coinlist. a marketplace for the SAFT projects.
Learn more: IPFS is a peer-to-peer hypermedia protocol that responds to the problems of the loss of information on the Internet. Implementing the blockchain technologies the IPFS protocol aims to build a faster, safer and more open internet.
This article is not a legal or financial advice, instead, it is published for informational and reference purposes only. If you have any questions about the SAFT model or legal ICO practices feel free to apply for a free consultation now.
Not the ICO
Modelled after the SAFE (Simple Agreement for Future Equity) that Y Combinator uses for early-stage investments, SAFT relies on the SEC Regulation D from the Rules 506(b) and 506(c). While limiting the sale of the token to the accredited investors, it provides the founders with the ability to pre-sale their tokens before the release of the working prototype.
Interesting fact: in case the company’s goal is to raise the funds from non-acredited investors primarily the pre-sale could be organized under the SEC Regulation Crowdfunding (RCF) under the Rule 504.
Now, once the product is launched and the founders aim to generate and distribute the initial amount of utility tokens to the community the ICO takes place.
Rule of thumb: SAFT is the pre-sale for the accredited investors only. ICO is to generate and distribute the utility tokens.
If you aren’t 100% sure what the Utility Token is; what’s the deal with the Howey Test; why SEC has called Munchee Inc ICO after 48 hours of their launch for selling securities under the name of utility tokens or if you’re genuinely interested to know if you can register an ICO with SEC feel free to click the links and browse our blog.
Do you SAFT?
If you’re interested to learn more about launching an SEC compliant ICO feel free to reach out to Crypto Lawyers Corporation and schedule a free consultation.
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This blog was created in order to educate the Crypto Lawyers Corporation clients and partners about the developing world of ICO campaigns, be an introduction to the world of Blockchain, the latest industry updates and share our professional experience. However, none of the materials in this blog should be regarded as legal or investment advice.