A lawyer working for a16z, the crypto investment division of venture capital firm Andreessen Horowitz, has advised against publicly selling tokens in the US to raise funds. In a recent blog post, Miles Jennings, the general counsel for a16 Crypto, stated that the US Securities and Exchange Commission (SEC) has made it clear that Initial Coin Offerings (ICOs) fall under securities laws. Jennings emphasized that even if the instruments being sold were digital assets or shares of stock, ICOs that promised a future return to investors were considered securities transactions. While the popularity of ICOs has declined in the US, Jennings warns that they still persist in new forms. He mentioned the “Protocol Owned Liquidity” and “Liquidity Bootstrapping Pools” schemes as examples. Jennings advocates for projects to avoid these schemes, as they come with legal risks, and instead explore alternative ways to raise funds that comply with securities laws. He concludes by stating that public sales in the US should be avoided, while public and private sales of equity and tokens outside the country can be conducted in a compliant manner without facing registration requirements.
