Certain crypto offerings aren’t shying away from SAFT agreements and accredited investing, at all. KODAKCoin is one of those offerings. With its new accredited ICO scheduled to begin on May 21, a brief overview of what SAFT agreements are, could serve to make the process of running an “accredited” ICO, clearer.
First and foremost, KODAKCoin effectively licensed the Kodak brand from the original company. It’s not a crypto project that’s being directly run by Kodak. It’s actually run by a company called WENN Digital, Inc., which claims to have a large amount of experience with Blockchain-related projects. Secondly, it’s one of the first ICO’s that will directly follow suggested and required regulatory frameworks in the USA.
The primary example of how “following” current regulatory frameworks could play out, can be understood through what SAFTs are. According to Business Insider as well as other sources, a SAFT is a “simple agreement for future tokens.” This basically means that no tokens or coins are actually given out during the ICO. Investors merely receive written promises of some sort to the effect that they will receive a certain amount of stake or tokens in the project, when it launches.
To invest in the first place, requires becoming an accredited investor, which is a heavily involved process in the USA, to say the least. All in all, an individual that wants to be an accredited investor must be able to prove that they have holdings that total more than $1 million, not including their house. This is by far not the only thing that an investor needs to do to become accredited but it may be considered the foundation of the process.
The true connection between a SAFT and the Crypto space is that SAFTs have been suggested to be a possible solution to the relatively high level of uncertainty related to the regulation of crypto projects, thus far. To be clear, they’re not a clear and concrete requirement, but there is a logical argument as to why they keep the company and the investors alike, safer than a traditional ICO. In addition to all of this, SAFTs were created in response to the rise of the Blockchain, so it is logical to say that they wouldn’t exist without it.
If you’re interested in a more detailed explanation of SAFTs, Business Insider seems to have a good grasp of what they are. Business Insider uses the analogy that SAFTs are like a mix between a gift card and purchasing stocks from a private firm. You get a promise of a certain level of stake in the company, its offering, or both and the company is apparently obligated to deliver. On the other hand, in many traditional ICOs, we see disclaimers that essentially say that no monetary return is, at all, guaranteed.
With Kodakcoin, however, since there are SAFT agreements, there is a promise of at least a certain level of usability of the future platform. Since the Kodakone platform, which is where the coin will be used, has partnerships with Stellar, NEM and the Blockchain Institute, a research firm, the future for Kodakcoin appears promising.
Certain key questions still exists, despite the positive implications that come from these partnerships and the clearness of what a SAFT agreement is. For example, how will SAFT agreements play out in practice? Furthermore, how will this affect future views on how the Blockchain and Crypto industry should be regulated?