Posts by Lahdan Rahmati, Esq.
Five Mistakes Longfin Made and Why The SEC Froze $27 Million In Assets
On April 4, 2018, the United States Securities and Exchange Commission (“SEC”) obtained a temporary restraining order (“TRO”) freezing more than $27 million in trading proceeds from allegedly illegal distribution and sales of restricted shares of Longfin Corp. (“Longfin” or the “Company”) stock involving Longfin, Meenavalli (its Chairman, Founder and CEO), and three other affiliates,…
Read MoreBite Token Is “100% A Security Token” & a Good Example of an SEC Compliant ICO
Causam eXchange, Inc., (Causam) a privately-held advanced energy settlements company, launched its presale on March 8, 2018 pursuant to Rule 506(c) of Regulation D. The company plans to develop the first Blockchain Instrument for Transferable Equity (BITE), an equity security that is tokenized in a smart contract executed on the Ethereum Network. The smart digital…
Read MoreDid You Know That Foreign Issuers Can Also Rely On Regulation Crowdfunding?
It is a little-known fact that foreign companies can use Regulation Crowdfunding (Regulation CF) to raise capital from accredited and non-accredited investors in the United States (U.S.). It is a commonly held belief that Regulation CF is available only to U.S. domiciled companies with a principal place of business, operations and executive officers located inside the U.S.…
Read MoreOTC Markets Group Believes FINRA And SEC Rules Hurt Small Issuers
On January 8, 2018, the OTC Markets Group issued a response letter to FINRA’s request for comments in which OTC Markets Group states that the “cumbersome operational processes around Rule 6432, and the related Rule 15c2-11 under the Securities Exchange Act of 1934 (SEA) unnecessarily impede capital formation by small issuers.” The OTC Markets Group goes on to say that Rule 6432…
Read MoreRegulation A+ Improvement Act Of 2017 May Change Capital Raising Cap In A Big Way
The Regulation A+ Improvement Act of 2017 (the Act) was introduced on November 7, 2017 by Republican Thomas MacArthur and recently passed 246-170 votes with the overwhelming support of Republicans. Ready For Some Background? In mid-2015, the U.S. Securities and Exchange Commission (Commission) amended Regulation A (this is not a typo – Regulation A+ is not the real name…
Read MoreSEC Subpoenas And Guidance On Investing In Cryptocurrencies And ICOs
Technology companies and advisors involved in cryptocurrencies have received a number of subpoenas and information requests from the U.S. Securities and Exchange Commission (SEC) during the last few weeks and they are alarmed. While the content of these subpoenas and information requests have generally remained undisclosed and will continue to remain as such for weeks…
Read MoreThere Are More Ways Than One To Launch A Compliant ICO
You are reading this because you or someone you know wants to launch an Initial Coin Offering or Initial Token Offering (“ICO”) in 2018. You also may not know exactly how to get started but there is one thing you are absolutely certain of: you want to raise capital without violating the federal or state…
Read MoreRegulation CF Issuers must comply with Annual Reporting Obligations
If you are reading this, then you are probably an issuer who sold securities in a Regulation Crowdfunding (Regulation CF) Offering – Congratulations! Not. So. Fast. You must comply with annual reporting obligations in order to continue relying on the Regulation CF exemption. A Quick Intro Title III of the Jumpstart Our Business Startups (JOBS)…
Read MoreIllegal Munchee ICO offers Lessons on How to launch an SEC Compliant ICO
On October 31, 2017, Munchee Inc. (Munchee) launched an Initial Coin Offering (ICO) to raise $15 million to improve its blockchain-based iPhone app, an app to post pictures of and review restaurant meals. The next day, the U.S. Securities and Exchange Commission (SEC) contacted Munchee – not because they were interested in the token sale –…
Read MorePlexCoin ICO Scam Promised Astronomical Returns before the SEC shutdown
ICOs are on the rise and the SEC’s Cyber Unit is proactively fulfilling its promise to protect investors against cyber-related misconduct involving distributed ledger technology and ICOs. Earlier this month, the SEC filed fraud charges against Dominic Lacroix, age 35, Sabrina Paradis-Royer, age 26 (Lacroix’s business partner), and PlexCorps aka PlexCoin, an unincorporated entity (Lacroix’s company). The SEC’s complaint, filed December…
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