From CryptoMoms Forum:
Quote from: Ashley on November 01, 2014, 02:55:30 PM
If a large, already regulated, financial institution like Newnote Financial Corp. buys into a cryptocurrency payment processor, are they already covered as far as cryptocurrency regulation goes? Or would they have to own the whole thing? Maybe these big companies see gold mines in deals like this.
http://www.thestreet.com/story/12928029/1/newnote-financial-corp-acquires-equity-in-major-crypto-currency-payment-processor-coinpayments-inc.html*********************************
Quote from Shepherd:
Hi Ashley. I was hoping that someone with a legal background would answer your important question. Let me give it the best shot as a layman and someone who was the CEO of a publicly traded company one time.
Let us first take a closer look at the official statement released:
“Newnote Financial Corp. (the "Company"), (CSE: NEU; OTCQB: NWWTF; FSE: 1W4) is pleased to announce it has purchased an equity position in the crypto-currency payment processor Coinpayments Inc. ("Coinpayments")
Coinpayments Inc. is a privately held payment processor operating the Coinpayments website, a service similar to Coinbase and Bitpay.”Based on that statement, NEWNOTE Financial Corp, is a publicly traded company, OTCQB, that purchased “an equity position in the crypto-currency payment processor Coinpayments Inc.” and that “Coinpayments Inc. is a privately held payment processor.”
The answer is “no”. NEWNote Financial is just another investor. For it to be absorbed under the approved regulatory umbrella it has to be a complete merger, with new filings and approvals from the Canadian Securities Administrators, Coinpayments Inc, is still the same legal entity, with no more and no less legal sanction before the investment from Newnote Financial.
Using a publicly traded company to acquire other crypto related companies is an interesting concept, to rapidly grow the parent company. It is one that I am personally interested in. However, given the current regulatory environment it will be met with a lot of legal hurdles and enormous cost along with long delays, making it far less attractive.
Newnote Financial Corp. (Formerly Winrock Resources, Inc.) is a new small Canadian company, traded over-the-counter through the Toronto Stock Exchange. They appeared to have a very aggressive growth strategy, constantly pushing the limits. It is a high risk strategy, possibly with high rewards.