Seeking Guidance: Legal Challenges ERC20 Token

[KiranKBS]

Hello Bitcointalk Community,

We are a group of software engineers who have successfully launched an AI Utility https://www.aiplore.com/#  independent of cryptocurrencies. Seeking financial freedom beyond our 9-5 jobs, we plan to launch an ERC20 token to raise funds for further development and explore AI utilities in the Crypto Domain.

Currently, we have a fully functional utility and 2nd impressive demoable utility as prototype, with a ready website and engaging Twitter account. However, recent SEC actions have created uncertainty   regarding the legality of our ERC20 token creation. We seek your advice on deploying contracts and establishing mechanisms for sharing returns or dividends, as we approach the imminent launch after investing significant time.

Your valuable insights, experiences, and suggestions are greatly appreciated.

Thank you for your support,
Kiran

[KiranKBS]

We checked few decent and big projects like Floki, Turbo, 0x0 AI, Ben, Volt Inu... but one thing we are not sure is legel concerns and practices around Legit and Doxxed Projects.

SEC is funny. They wait until Project is hot and successful!

[vv181]

If you trying to raise funds for your product, why do you have to make a cryptocurrency token? Especially, your product is not cryptocurrency-related and specifically currently has no feasible use case within this space.

Your only goals are to raise fund. As you have said yourself, trying to get out of 9 to five jobs. Then you should simply make a product that users truly want, instead of exploring what are the intersection between your current features with cryptocurrency. If you need money, you better seek a grant or investments, instead of seeking cryptocurrency user investment while there is no legitimate use case to be incorporated with.

[Adbitco]

If you trying to raise funds for your product, why do you have to make a cryptocurrency token? Especially, your product is not cryptocurrency-related and specifically currently has no feasible use case within this space.

Additionally let say, after creating the token and people invested and probably they raised their required funds what then now happened to the holders, i mean the investors who invested in that their token? What would be their benefits after bring out their money to invest in your no usecase and prospect token or not having the plans to list them were investors may likely get back their ROI.
I think op needs some drafting, were you may draw your plans clearly to show that after which the token has been created there would be some further development to convinced investors funds are safe.

However, Op since your intention are being made openly I don't think there's any possibility for you to get investors over here than vv181 already said. It's better you go get grant or a loan than want to use a trickish way to launch a token to raise money from the people over here. That is why we need to be very careful with any form of people and their project, they may come with all form of sweet word in other to lure people invest in their project.

[o48o]

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We seek your advice on deploying contracts and establishing mechanisms for sharing returns or dividends, as we approach the imminent launch after investing significant time.
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Here you go, only this makes it an instant security as promising dividends would be investment contract.
Usually people have messed it up right on the advertising, all it needs is expectation of a profit. Even hinting there could be some is enough.

Frankly i am worried that you need to ask legal advice from here. Not from the actual legal professionals. I mean there's nothing wrong asking but take the answers with a grain of salt.

Asking legal advices from pseudonyms and making financial decisions based on that makes me think you are going to mess something up. Hire a professional for a professional work.
Or you might end up paying way more then their salary.

[KiranKBS]

First of all, i am extremely sorry that i could not reply early!

I thought my thread did not catch bitcointalk user eyes and left this thread.

Here i see couple of suggestions. Thanks for it!

[KiranKBS]

If you trying to raise funds for your product, why do you have to make a cryptocurrency token? Especially, your product is not cryptocurrency-related and specifically currently has no feasible use case within this space.

Your only goals are to raise fund. As you have said yourself, trying to get out of 9 to five jobs. Then you should simply make a product that users truly want, instead of exploring what are the intersection between your current features with cryptocurrency. If you need money, you better seek a grant or investments, instead of seeking cryptocurrency user investment while there is no legitimate use case to be incorporated with.

Very good point Sir!

Yes it is true that Crypto Token is not our goal. We were and still working on Our Project AI chrome extension, already released and under usage of public.

My initial thought process was using Token fund raising and thats the reason i was afraid and reached out for feedback.

AIPlore is my project and it is generic now. After spent some time with different domains such as IIOT(Iot 4.0), Supply Chain, Logistics, BlockChain... we picked that we want to extend AIPlore domain expertise, prompt setting & LLM tuning into BlockChain.

Hence, it made me to think the way to take an opportunity too!

[KiranKBS]

If you trying to raise funds for your product, why do you have to make a cryptocurrency token? Especially, your product is not cryptocurrency-related and specifically currently has no feasible use case within this space.

Additionally let say, after creating the token and people invested and probably they raised their required funds what then now happened to the holders, i mean the investors who invested in that their token? What would be their benefits after bring out their money to invest in your no usecase and prospect token or not having the plans to list them were investors may likely get back their ROI.
I think op needs some drafting, were you may draw your plans clearly to show that after which the token has been created there would be some further development to convinced investors funds are safe.

However, Op since your intention are being made openly I don't think there's any possibility for you to get investors over here than vv181 already said. It's better you go get grant or a loan than want to use a trickish way to launch a token to raise money from the people over here. That is why we need to be very careful with any form of people and their project, they may come with all form of sweet word in other to lure people invest in their project.

Sir you have a point. My intention is not trick ppl in Bitcointalk. It just happened that i landed up here through CMC form one of the options.

I am here since May and saw so many tokens PnD. I hesitated to launch any token even though i tested my contract creation learning over mainned and testnets.

As i mentioned, i coincidentally picked Crypto domain for my project to train further i am also thinking to relate it with token somehow.

At present we parallely working on our project and also sketched out how can Crypto Token complement each other.

We dont want to treat this as securities and funding any more rather treat it as a token through which AIPlore services van be bought and get some discounts.

The value of token depends on the project purchase and circulation.

We are still carfully going through Tokenomics, sustainable model,  Values of token holders etc.

[KiranKBS]

-cut-
We seek your advice on deploying contracts and establishing mechanisms for sharing returns or dividends, as we approach the imminent launch after investing significant time.
-cut-

Here you go, only this makes it an instant security as promising dividends would be investment contract.
Usually people have messed it up right on the advertising, all it needs is expectation of a profit. Even hinting there could be some is enough.

Frankly i am worried that you need to ask legal advice from here. Not from the actual legal professionals. I mean there's nothing wrong asking but take the answers with a grain of salt.

Asking legal advices from pseudonyms and making financial decisions based on that makes me think you are going to mess something up. Hire a professional for a professional work.
Or you might end up paying way more then their salary.

Sir to be honest, you made my situation very clear and gave very insightful comment. I must thank for your devil advocate words!

We are not going to treat Crypto Token as securities and no mentioning of returns, investment etc.

We are planning to treat a token as branding to the project, discounts rate of service for the users holding tokens or buy service cheaply paying with tokens. Thats all the transaction going to be.

How the staking, roi, value of token we are not going to mention neither promise. We will write disclaimer such way!

I am certainly going to take your advice and talk to Corporate Legal Service!
Thanks!