RE: Thinking of Crowdfunding your Crypto project? Think Again.

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Thinking of Crowdfunding your Crypto project? Think Again.

in crowdfunding •  8 years ago 

Most definitely get legal advice with any crowdfunding operation. I also agree with KYC AML in many cases to avoid unpleasantness...

What would happen if you were in a jurisdiction that did not have to comply with any FATCA, or regulations as a sovereign nation?

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Avoid, as they attract attention for mere fact of operating there. Some jurisdictions, like Cyprus, should be avoided despite signing the agreement to comply as much of their foreign transactions have origins that are questionable. As an American, I don't get away from regulations because I am in a foreign jurisdiction or my counter-party is. They and I just get more paperwork and forms to fill out. That doesn't mean some risk in these regards isn't worth it, but if one is going to engage in actions not in compliance with the U.S. regulatory regime, be aware of what it is. I would question anybody that does like Cryptsy was incorporated in Belize. That should have been a red flag as it would probably be just as easy incorporating in Bermuda or BVI. However, Belize has certain advantages for certain people and I would like to avoid those people.

Also, it i just as important for people who go through the process of getting funding or developing a platform for crowd funding to read the regulations themselves and think through their implications as they could impact business decisions long-term. Many of the required tests sponsored by FINRA concern these regulations. If your business is finance related, you will save a lot of money in lawyers fees if you know what they are and they impact your industry. I traded for several firms and on my own without ever needing the help of a lawyer. This process is a bit different than raising money but it still comes down to filling in a bunch of forms.