All sides considered There aren’t any globally coordinated regulations for crowdsales, but in many ways that’s beside the point — as the name implies, crowdsales are sales to ordinary consumers and there are hosts of plaintiffs lawyers waiting to represent any who feel jilted. Moreover, no serious project wants to harm potential users, nor do they want to sell them risky tokens that can’t afford to be lost entirely if things don’t go well. At the same time, dealing with securities regulations is a burden and perhaps most importantly, runs the risk compromising the goal of ideally ubiquitous access to tokens once the network is thriving. It seems hard to imagine a regular person calling their stock broker to buy an Uber token when they want a ride. This said, it does seem possible for blockchain and its entrepreneurs to help advance regulations and work with leading exchanges such that “security” tokens seem much less intermediated, including refining suitability filters that might otherwise feel imposing to regular people trying to purchase ordinary things. So how do we get from here to there? One idea, and one still fraught with its own set of regulatory ambiguities, might be a convertible token. Early capital raises can be completed with accredited investors to ensure securities compliance when the related risks are most apparent. Some might view this a gift to the venture capitalists that companies might otherwise be seeking to avoid. At some level it is, but there is no reason such sales can’t be widely syndicated in an effort to realize some greater degree of democratization. Regardless, it’s a compliant route that restricts sales to those sufficiently suited to absorb the risk of full loss. The ideal would be to use this approach only in the beginning — for just enough seed capital to get the product shipped and the network in motion. When the convertible tokens are originally sold, the company and its investors can agree on a plan to divvy up the tokens on the front end, including among the community with the token incentive plan to bootstrap the network. This approach being distinct from a wait and see how things develop approach before making any such decisions. Doing so would preserve investor’s equity rights during the build phase and would let (obligate) them to convert to being token holders once the network is operating and increasingly in the hands of its community. Users would then be able to earn tokens in accordance with the incentive plan — performing the prescribed work for the bargain — and importantly not (at least initially) buying them from the company. Users that do buy them would be doing so for their current and active use — and ideally doing so from each other. So on the network launch date, there would be no tokens in the market and supply would grow in the first order entirely as a function of the amounts earned by the users — much the way Bitcoin has always done — and their price would be market based. In this way, no user/consumer would have made an “investment” per se in the company — rather they will have simply been compensated for work performed. So far, tokens in this circulation seem more like a currency than they do a security. Among many others, one big question with is approach is what becomes of the tokens still being held by the company and those allocated to investors and founders? The release / sale of these tokens into its already existing secondary market seems like a stickier issue from a regulatory point of view. The goal of course being to permit the token to be regulated more like a money services business and in a more everyday user friendly and accessible way. An important related question is whether or not fiduciary duties should shift entirely to the token (and away from the equity) upon any such conversion? The answer to this question likely depends on the preferences of the founders and their early investors. Pre-baking this decision at the time of issuance, and thereby foreclosing on potentially important optionality in an otherwise dynamic environment, may not be realistic as both may prefer a future facts and circumstances assessment. This is where the stated intentions of the founders could bring a lot of much needed clarity to its existing and future community. Another approach towards perhaps this same end goal might be one similar to that Ripple is pursuing. Setting aside any judgments about its technology and business model, Ripple is treating XRP as an asset of the company — its equity. Indeed, it is conceivable that this model could ultimately migrate to a similar type conversion at some future date. Ripple is already blazing a trail on many important token and capital / currency markets fronts — liquidity, regulatory experimentation and appropriate secondary markets disclosure obligations for digital currenices which are otherwise ill-defined. They’ve absorbed a lot criticism on many fronts, but I think the ones specifically related to experimentation with their tokens has so far been mostly unfair. Quibble with certain of their public comments if you will, but also recognize that they seem to be trying to establish full and fair disclosure standards for digital currencies. Whether they make progress in this regard is still an open question. Making tokens launches work — and balancing capital raising, its related governance and ideal end use state is tricky business. Dealing with regulations seems like the front line in this battle, but the deeper principles of dealing equitably with stakeholders matters just as much. Building a token economy and democratizing capital formation can be advanced along with blockchain innovation, it just takes a considered and well-intentioned approach to make this happen. It also takes a lot of earnest and equally well-intentioned experimentation. Disclaimer: The contents of this article are neither investment nor legal advice. Digital currencies are risky and any purchase of them may be lost entirely. Please consult qualified investment and legal professionals for any related advice. Disclosure: I own some Ether. I don’t own any XRP, nor am I an investor in Ripple.

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蓮沼貴裕（Takahiro Hasunuma）