Reporter Brady Dale from news site leader in blockchain news, Coindesk, spoke with Smith Anderson partner Margaret Rosenfeld regarding the impact of the decentralization of Artificial Intelligence-run, crowd-sourced hedge fund Numerai.
According to the CoinDesk article, “Numerai to Cut Token Supply by 10 Million to Become ‘Decentralized’”, the numeraire (NMR) was launched in June 2017 as an early departure from the initial coin offering (ICO) template. Now, with the final upgrade of the company’s smart contract on ethereum, the maximum supply of tokens will drop from 21 million to 11 million, and the company will essentially throw away the keys to the contract controlling its supply.
Regarding whether Numerai founder Richard Craib has been in touch with the U.S. Securities and Exchange Commission (SEC) about its business model and Numerai’s choice to not do an ICO, Margaret’s commentary highlights what could be in store next for the hedge fund as a result. “I think from a securities perspective the key question is whether or not the SEC will go after a company that only did an airdrop, rather than an ICO.”
Margaret also commented on how the timing of the decentralization will play out with the SEC, noting that the SEC will look at everything the company has done with the token, not just what it’s doing once it has completely decentralized. She goes on to say that “the ‘taint of a security’ doesn’t just go away in the eyes of the SEC.”
Margaret has corporate and securities law experience throughout the United States, as well as across the globe. She leads Smith Anderson’s Blockchain Technology and International Law practices and has over 20 years of corporate and securities law experience. Her extensive experience with compliance and regulatory matters lends to the structuring of initial coin offerings and token generation events for companies as well as representation of purchasers in the crypto space.
To read the full CoinDesk article, click here.