Key Test Cases to Shape ICO Future
One of the keynote speakers from a big four accounting firm at the October 2017 Hong Kong Fintech conference boldly claimed that there are "no experts" in the ICOs field and that if you see someone who professes to be an expert on ICO, you should "run away". Well, one of the leading law firms in this field has stepped in to defend Tezos in one of the litigations against it and its founders. Should he be running away now? The Tezos lawsuits will dramatically shape the future course of case law on ICOs and it is good that lawyers experienced in the nuances of ICOs are taking the lead to defend Tezos in an attempt to prevent the courts from issuing judicial precedents that may be damaging to the future of the ICO industry for issuers.
So far there are four ongoing cases against the US$232 million Tezos ICO issuance back in July 2017 which will amongst them set the tone on whether tokens are considered securities under U.S. laws. One of the leading law firms in this field Cooley is co-representing Tezos in this action. Cooley filed brief to remove this action to the U.S. District Court for the Northern District of California because the matter raised federal law issues.
There are three more lawsuits against Tezos, one filed in the U.S. District Court for the Middle District of Florida and the other two in the U.S. District Court for the Northern District of California.
It is uncertain whether these separate actions would yield conflicting case law on the definition of tokens as securities. I expect that many amicus briefs would also be filed as industry experts, professionals, issuers and asset managers weigh in on the legal issues to be raised. Would not be surprised if the U.S. SEC also submits a friend of the court brief. That would be an excellent way to get a glimpse of how the SEC itself sees tokens. It would be interesting to see whether the courts will discuss the relevance of ICO best practices to issuer liability and whether the adoption of such best practices could mitigate its culpability in some manner.
I am interested in seeing the court's treatment of possible best practices for ICO issuance in their opinions.
Looking forward to submitting my amicus brief in the litigation co-represented by Cooley.
#ICO #fund raising