ICO issuers should be aware of the significant SEC regulatory action has occurred in the digital asset space. Digital assets are a broad category of digital tokens that are issued in ICOs, or initial coin offerings. Within the last three years, the SEC has issued a number of statements concerning the cryptocurrency environment, discussing both enforcement priorities and regulatory trends. Companies considering an ICO must be aware of state and federal regulatory frameworks, including guidance put out by the SEC, the IRS, FINRA, and the CFTC.
Depending on the business activities of your company, different regulatory frameworks may be applicable. Federal law regulates cryptocurrencies under a number of different regulatory schemes, including using the Commodity Exchange Act and FinCEN. The FTC is involved in the regulating of mobile payments, focusing on consumer protection and privacy issues. Depending on the structure and content of your business activities, Federal Bank Secrecy Act principles or anti-money laundering practices may apply.
On the state level, virtual currency regulation is in its infancy. Model legislation introduced in 2017 (the Regulation of Virtual Currency Businesses Act) has not yet been adopted on a widespread basis, though it does provide insight into the types of concerns surfacing at the state level. In New York state, the BitLicense regulatory framework requires companies issuing a virtual currency or performing certain exchange services to apply for a BitLicense from the New York State Department of Financial Services.
Blockchain technology is at the heart of a number of revolutionary fintech applications. Blockchain’s distributed ledger technology is used in areas including cryptocurrency, smart contracts, and lending. Blockchain-oriented companies that are involved in consumer financial services must be in compliance with CFPB rules. Entities regulated by the Federal Reserve or the FDIC must also be aware of certain regulations relevant to their status as regulated firms before adopting blockchain technology. Certain state laws apply, and legislative concerns vary state to state.
In an initial coin offering (“ICO”), a company will issue digital coins (also known as tokens) to investors in a manner similar to that of a company issuing equity in an initial public offering. Companies will use ICOs as a capital raising mechanism. There has been significant development in the regulatory frameworks governing ICOs. The SEC and the CFTC have indicated that both agencies are interested in expanding the regulations covering this capital raising pathway. If your company intends to utilize ICOs as a capital-raising tool, we can advise you on current trends so that your company can make appropriate strategic decisions.
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We have worked with Robin for almost a year now and it has been an incredible experience. Robin thinks outside the box, is very professional and extremely pleasant to work with. She is an expert in Regulation Crowdfunding and we are very satisfied with our choice to retain her. I would recommend Robin to any small start up. Robin is extremely qualified, reliable, and very cool!
Patricia Hertling, Co-Founder
Robin and her team were extremely knowledgeable about the evolving legal requirements around crowdfunding. The entire team was responsive and professional throughout our campaign. The team answers questions in a thorough and efficient manner which made it a cost-effective relationship for our small business.
Carlos Ventura, CEO
FEAST & FETTLE
Robin has the insight and compassion that is needed for any startup working to raise capital or manage the legal aspects of their business. She is not just an attorney but also a business women who will elegantly guide owners or decision makers to make the best possible legal decisions. She will actively understand your business, pursue various options and connect with outside resources in-order to help her client fully understand all their legal option. She is passionately focused on making sure her clients make the best possible decisions that will positively impact their business for both the short & long term.
Sandra Gault, Founder and CEO
We had the pleasure of working with Robin and her team to conduct our legal review for our crowdfunding campaign with Indiegogo and MicroVentures. We had been through the Reg D process before, but Reg CF was entirely new to us. Robin and her team were great in explaining the process and meeting our rushed deadlines to get everything ready. I highly recommend that anyone considering an equity crowdfunding campaign use Robin as their legal team.
Sunny Washington, CEO
The process of raising capital for any startup or early stage company is fraught with complexity, challenges and details that are often largely outside of the regular day-to-day activities of the organization. In addition to this reality, the process can be demoralizing, time consuming and very expensive. In contrast, our experience with the Reg CF process, while requiring real work and preparation, has been cost effective and efficient. A huge part of that was the feedback and guidance of Robin Sosnow, Esq and her staff. Robin's legal review was detail-oriented and thorough while still fast. The back-and-forth surrounding our questions and the final review process seamless as well. I would not hesitate to recommend or hire Robin in the future.
Brendan Burns, CEO
STEPSTONE ARTS RESOURCES
Equity Crowdfunding is an exciting new frontier for entrepreneurs, but can be confusing and frustrating to navigate, even with an experienced partner. Robin and her team are experts in the space, and were critical partners for us in our journey. They were responsive when we needed them and thorough in their feedback, ensuring to the last detail that no mistakes no mistakes were made. If you’re thinking of embarking on an equity crowdfunding campaign, reach out to Robin sooner rather than later!
Jordan Schwartz, COO & Co-Founder
We worked with Robin and her team for our equity crowdfunding raise on Microventures.com. As a first-time crowdfunder, she helped me navigate the process and made sure all of my concerns were addressed. Robin went above and beyond my expectations -- especially when she hired our company and helped us promote our crowdfunding campaign to her audience! The best JOBS Act firm in the biz!
Nicholas China, CEO
Robin Sosnow was our attorney on our crowdfunding that we did with IndieGoGo/Microventures. We were under the gun to get things going quickly and I put the pressure on. Robin and her team were terrific. They explained an area that was new to me and got all the paperwork done in record time. I'd highly recommend them for this kind of work, they are the experts.
Michael Hoffman, CEO
We had the opportunity to work with Robin Sosnow, PLCC during our recent crowdfunding venture. Robin was very professional and explained the process in detail. Any time we had any questions Robin was available and prompt on her responses. Going through a crowdfunding process is very time consuming and requires a lot of documentation. With all the efforts that Robin put in place it made our job easier to obtain all the documentation and complete the process in a timely manner.
Christinia Marc, Administrative Manager
My company and I worked with Robin and her team on a rather complex equity crowdfunding launch. Robin clearly knows the JOBS act inside and out - and she and her team always went the extra mile to make sure everything was buttoned-up properly. She's an excellent attorney and I'll definitely be working with her again.
Paul Siedarski, CEO and Head of Product
Sosnow & Associates has been integral to us launching our crowdfunding platform, not just with their expertise but with meeting quick turnarounds for prompt regulatory responses. Couldn’t do it without you. Thank you!
Luiggi Pera, Miventure Cofounder & CRO
Robin Sosnow and Manuel Pesendorfer are 100% plugged into the new SEC rules for Regulation Crowdfunding and continue to advise our funding portal to maintain compliance and support our business. They are super-connected to top influencers in the equity crowdfunding ecosystem and always ready to make introductions. We highly recommend Sosnow & Associates, and they are also nice people to work with.
Bruce Virga, CEO