After Securities and Exchange Commission’s relentless crackdown on Initial Coin Offerings (ICO) and cryptocurrencies, it is not unfair to say a lot of potential ICOs are unsure where to turn. To give a little clarity to people, Crypto-News spoke to Property Coin, an ICO based in the United States of America and gained pointers on how to carry out an ICO, under the current laws.
Q1. On what basis do you suggest selecting advisors to a project?
First and foremost, we look at the person’s experience. Do they have a background in the space in which they are advising us? We’ve seen so many people out there who are selling themselves as “ICO experts” or “expert advisors” but when you dig into their experience, they either have little to no business experience or were working in a completely unrelated and insignificant field prior to gaining their “expertise”. If you look at our team of experienced advisors, we have selected them based on their experience, expertise and relationships in the crypto, tech and marketing space. We think their experience and relationships, combined with our extensive experience in the real estate, structured finance and operating space rounds out our team nicely and covers most, if not all, angles of operation that we feel are critical to the successful growth of our already existing company.
Q2. Given that marketing firms may also be hauled up under the SEC’s new diktat, how does a potential investor go about choosing a marketing firm that will help his product reach the masses?
Again, I think it comes down to experience and the quality of the team. If you look at a lot of the marketing/ branding services out there, you’ll see that these “experts” have little to no experience in building brands or traditional marketing. Sure, the way in which we are marketing things is ever evolving and one needs to stay on top of the newest trends, but if you don’t have a foundation in brand development or marketing, you are likely to fail or worse, say something that you are not allowed to say. This market, especially in the U.S. is becoming increasingly more regulated and there are very strict rules governing what can and can’t be said. You need to make sure that your marketing team does not put you in a compromising position because of their lack of experience.
Q3. For many of our readers who are also part-time investors, how to differentiate between what a securities token is and the other kinds of tokens (if any)?
As we started our journey into the crypto and ICO space, we took our experience as former investment bankers and asked ourselves, does the buyer of an ICO have a reasonable expectation of profit that depends on the actions of the issuer? If the answer to that is yes, then (in our opinion) you’ve got a security. In the U.S. the SEC has a test, called the Howey test, which asks a few, very similar questions and they are applying that test to all ICOs based in the U.S. As it became clear to us that most ICOs were securities, we decided to be very diligent and thoughtful in how we structured Property Coin. We engaged Dentons, the largest law firm in the world, with a highly respected structured finance team to help us craft Property Coin as a Reg D offering in the U.S. and a Reg S offering elsewhere. We think that this structure represents the first ever securitized portfolio of professionally managed real estate assets and loans via the blockchain and hope that this will be the foundation for asset backed and corporate/ structured finance for many, many years to come.
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