Retroactive token airdrop to your online community (wich offshore country)

[MarkusCostigan]

Hi guys, let's say you have an online community (forum > 10k unique active users per day) and you decide to airdrop tokens to users.

To avoid it being considered security, the options could be:

1) Free Airdrop (no form of IDO, ICO, IEO etc)
2) Airdrop greater than 50% of supply
3) No form of token burning, reducing supply etc...
4) Access to premium content/service on the platform (utility) without needing to spend it but just hold a certain amount.
5) No form of staking or liquidity incentives

What could be the best and easiest country to create the structure?

Thank you.

 

[Shories]

An offshore jurisdiction would be best, such as the BVI or St. Kitts, however, I would not recommend selling any of these air tokens to any US citizen

 

[JackAlabama]

Hi guys, let's say you have an online community (forum > 10k unique active users per day) and you decide to airdrop tokens to users.

To avoid it being considered security, the options could be:

that wont work anyways (because it is an unregistered security) as soon as they caught up to this latest thing (airdrop).
Just exclude the us strictly and pray for your project being small enough such they will not care.

1) Free Airdrop (no form of IDO, ICO, IEO etc)
2) Airdrop greater than 50% of supply
3) No form of token burning, reducing supply etc...
4) Access to premium content/service on the platform (utility) without needing to spend it but just hold a certain amount.
5) No form of staking or liquidity incentives

What could be the best and easiest country to create the structure?

No country, why would you need one? Just drop the token.

 

[Shories]

No country, why would you need one? Just drop the token.

If he wants to do airdrop but never convert crypto earnings to fiat, then there is no need for a company.

But when he needs to convert to fiat/convert as income, a company is recommended because of the way the government will look at it, as they will want to see what the business is and how and where it operates, and where it operates is important because of the different regulations/sanctions/AML laws.

Also he is not protected in the case of someone doing a civil court lawsuit against his token in the case of a loss, as he will directly be liable to it compared to his company being liable to it.

You can hide your own persona very well under certain companies compared to you holding everything directly.

 

[JackAlabama]

If he wants to do airdrop but never convert crypto earnings to fiat, then there is no need for a company.

But when he needs to convert to fiat/convert as income, a company is recommended because of the way the government will look at it, as they will want to see what the business is and how and where it operates, and where it operates is important because of the different regulations/sanctions/AML laws.

Also he is not protected in the case of someone doing a civil court lawsuit against his token in the case of a loss, as he will directly be liable to it compared to his company being liable to it.

You can hide your own persona very well under certain companies compared to you holding everything directly.

you do realize what you suggest is very indicative of a security which needs to be adequately registered
Hence you will turn yourself in basically and the magical protection you quote doesn't exist.

If you do go the route of a company, then do it properly and issue shares.

 

[Shories]

you do realize what you suggest is very indicative of a security which needs to be adequately registered
Hence you will turn yourself in basically and the magical protection you quote doesn't exist.

If you do go the route of a company, then do it properly and issue shares.

It is not necessary for the company to have made a profit from the ICO. Profits can come from other sources on paper

 

[Billybob69]

How could this be considered a security? Where is the "investment of money in a common enterprise"? If all OP does it create the token and distribute it for free, I can't imagine it meeting the requirements of the Howie test...

United States: Finally, a court decides - XRP, by itself, is not a security. Your turn, Congress.

On July 13, 2023, Judge Analisa Torres of the Southern District of New York issued an Order on competing motions for summary judgment in the closely followed SEC v. Ripple Labs, Inc. litigation. As th...

insightplus.bakermckenzie.com

If I give out 10 magic beans for free, and people trade them between each other, how are they investing in my enterprise? I don't see the money do I, look at the SEC's case against XRP. If OP goes on to sell some of the tokens he has set aside, surely it would be the same situation as Ripple's programmatic sales, not a security.

"The court found that Institutional Buyers derived their expectation of profits from the efforts of Ripple, but that Programmatic Buyers did not. To reach this conclusion, the court identified several differences, but the key distinction was buyers' knowledge of whether Ripple was on the other side of the transaction."

Obviously, I am not a lawyer, so do not consider this legal or financial advice.