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Author Topic: Legal Guidance Needed - USA Commodity-Backed Coins / Tokenizing Inventory  (Read 28 times)
McDoublez
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March 16, 2018, 05:02:28 PM
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Hi,

We are a company in the USA in the business of commodity wholesale. We have several warehouses with commodity material. Ideally we would like to liquidate some of our physical inventory assets using crowdfunding and generate more liquidity capital for advertisement and inventory expansion. Therefore we were looking at tokenizing portions of our physical inventory and using that market value to back the token supply. We are willing to transfer commodity ownership to token investors together with possible dividend options. The commodity we deal with has healthy increasing supply and demand and an existing physical market which is not expected to loose its value anytime soon thereby providing additional benefits such as storage of value.

Am I correct with the assumption though that the SEC may have some problems with this concept considering that

a, we are USA based and
b, commodities are classified as securities and
c, we would be required to register as a money transmitter with the SEC which sounds like a lengthier process.

Any alternative options in the short-run?  I guess I am looking for some sort of legal guidance. I heard of a recent update out of Wyoming when it comes to the classifying coins as securities. Are Delaware registered companies allowed to book-keep crypto transactions as part of their overall accounting yet? Does the SEC overpower individual state laws?  Do we as a USA company now have to start an office in Singapore to be able to tokenize inventory using crowdfunding?

Sorry, lots of question. We are very serious about this. Any advice or links in the right direction would be great!

Comments much appreciated,
McD
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Coffee135
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March 17, 2018, 01:52:34 PM
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I think that now it is meaningless to talk about the rules. The G20 summit will be held next week. This summit will address the issues of standardization of the world rules for the use of cryptocurrencies and ICO. Next week, all the rules can change dramatically. Wait a while and follow the news.

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March 17, 2018, 03:56:01 PM
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The topic of G20 2018 appears to be primarily on cryptocurrencies in aspect to money laundering. I highly doubt this is going to affect our situation as far as tokenizing inventory located in the USA is concerned.
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March 17, 2018, 07:12:53 PM
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The topic of G20 2018 appears to be primarily on cryptocurrencies in aspect to money laundering. I highly doubt this is going to affect our situation as far as tokenizing inventory located in the USA is concerned.

I doubt there will be any discussion on crypto currency. I have just gone through the agenda of G20 summit and I sadly I could not see any single agenda is based on crypto currency. So no discussion will be held unless some country proposes it explicitly. However, the kind of attention crypto currency is currently getting from the various governments worldwide, I will be disappointed if no discussions are held on this topic. Summit has started from today so we will get full clarity within few days.

However, from your main thread, what I understand that your company is looking to liquidate a portion of your physical inventory assets using crowdfunding and generate more liquidity capital for advertisement and inventory expansion through ICO route and your company is based in USA. I would suggest you to drop the idea of ICO if you are planning to start from USA. SEC has cracked down a numbers of ICOs in recent past and they do not seem to stop doing this. AriseCoin, RE Coin, DRC are just to name a few. The main list is actually quite long and a little google search will reveal the whole list. So if you want to run your company's business with ease, drop the idea of ICO crowdfunding method, or else move to a crypto friendly country like Germany.


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