Issuers, promoters, curators, sponsors, facilitators, so-called “finders,” investment banks, law firms, affiliates and anyone else connected to Internet Coin Offerings (“ICOs”), the method by which startups or other parties can issue cryptographic tokens in an effort to fund or bootstrap a new blockchain network, should be on notice. Thanks to a range of U.S. securities statutes, rules and regulations, ICO token subscribers may have so-called “rescission rights.”
Rescission rights essentially to a “put option for their ICO investment i.e ICO token purchasers would have the right to sell their tokens back to ICO sponsors and obtain a full refund, plus interest from the company and sometimes its officers and directors.
‘Enforcement 40’ for 2020
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