Topic: SAFT and SAFE(US) (Read 110 times)

https://www.investopedia.com/terms/s/simple-agreement-future-tokens-saft.asp

"A simple agreement for future tokens (SAFT) is an investment contract offered by cryptocurrency developers to accredited investors. Because SAFTs are considered a security instrument, they must be filed with the Securities and Exchange Commission.

A Simple Agreement for Future Equity (SAFE) allows investors who put cash into a startup to convert that stake into equity at a later date—as long as specific conditions are met. For example, the company that received funds from the investor might specify in the contract that it must achieve specific goals before it issues the equity."

I have long been interested in how startups in the United States receive funding and register their projects with the SEC. SAFT and SAFE helps to attract money and easily register with the SEC, but there are other pitfalls.

https://www.sec.gov/education/smallbusiness/exemptofferings/rule506b
"Rule 506(b) of Regulation D is considered a “safe harbor” under Section 4(a)(2). It provides objective standards that a company can rely on to meet the requirements of the Section 4(a)(2) exemption. Companies conducting an offering under Rule 506(b) can raise an unlimited amount of money and can sell securities to an unlimited number of accredited investors. An offering under Rule 506(b), however, is subject to the following requirements:

no general solicitation or advertising to market the securities
securities may not be sold to more than 35 non-accredited investors (all non-accredited investors, either alone or with a purchaser representative, must meet the legal standard of having sufficient knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of the prospective investment)"

Solana, Near, Flow, SAND and many other projects used this method and then violated Rule 506(b) by using active marketing after the sale. SEC is already preparing new claims.