Blockchain Economics

Primary Markets, ICOs & Venture Capital

• Proceeds used to build networks
• Tokens usually issued prior to being functional
• Development, while open source, is largely centralized
• Promoters allocate themselves ‘premined’ tokens
• Tokens are fungible & transferable
• Scarcity is fostered with preset ‘Monetary policy’
• Purchasers anticipate profits through appreciation

Evaluating ICOs

• Assess Viability of Token Use Case
• Whitepaper Details and Source Code
• The Team
• Venture Capital Involvement
• Media and Community – Reddit, Medium, BitcoinTalk, …
• Monetary Policy
• Token Distribution
• Regulatory Compliance

Exempt Securities Offerings

Regulation D – Restricted Offerings, No Offering Statement

• 506(c) – Accredited Investors Only
• 506(b) – Accredited Investors (have money) + 35 Sophisticated Investors (knowledge but no money)– no General Solicitations
• 504 - < $5 million

Regulation A – Offering Statement with Financials

• Tier 1 - $20 million – Any Investors & must file with State Securities Regulator
• Tier 2 - $50 million – Subject to ongoing reporting requirements & Limits on non-accredited investors

Regulation CF - Crowdfunding

• $1.07 million through SEC Registered Platform, Information Disclosure and limits on Investors