SAFT goes forward in the world of the ICO

Is SAFT a guarantee of the legality of ICOs?
23 November 2017   1055

A lot of people don’t trust ICO because sometimes it seems like something illegal and doubtful. Adoption of the SAFT project means that investors do not have to fear that their money will disappear without leaving a trace. 

The abbreviation SAFT stands for “Simple Agreement for Future Tokens”. As stated in the white paper, SAFT is an official contract, which must be sold to investors. According to the contract, providers of capital have to support the company, which uses ICO, and the developers have to spend this money on building of an efficient network with required tokens. 

Equally important is another requirement for SAFT. It should be in conformity with the law of countries of investors and developers. The contract guarantee that the company has no right to issue tokens, which can be out of order. SAFT plays the role of intermediator between two parties and regulates their economic relations. The developer gets money through SAFT and the investor is entitled to expect some benefits from the company. 

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CFTC to Issue ICO Investor Advisory

Before buying coins, you need to thoroughly study their nature and understand what factors can affect their price, CFTC advises 
17 July 2018   82

The US Commodity Futures Trading Commission (CFTC) published a document with recommendations for potential investors in ICO projects and token buyers. This is reported by Coindesk.

The agency's document says that before buying coins, you need to thoroughly study their nature and understand what factors can affect their price.

Also, a potential buyer should remember that, depending on the structuring, some tokens can be derivatives, commodities or securities.

Buying digital coins or tokens only because you expect to sell them at a higher price later is the definition of speculation and carries considerable risk, regardless of how good a white paper, application or business plan sounds. Unfortunately, fraud is another significant risk to consider. Your best protection is to thoroughly research digital coins or tokens and exercise caution. 

CFTC ICO Advisory

The guide also states that before investing in the ICO, it is necessary to find information about the organizers of the project, and also to find out whether they themselves participate in their  ICO.

Representatives of the agency also refer to the study, according to which more than 50% of ICO start-ups ceased to exist during the first four months after the end of the token.