Since cryptocurrency proponents are probably not well aware of securities law and may not have access to financial and legal advisors, it may be easy for them to break the rules. The development of SAFT creates a simple and inexpensive framework that new businesses can use to raise funds while remaining in compliance with the law. We believe that the framework presented in the white paper is the best instrument currently available for navigation under US law. It does not just find successful legal structures; it tries to respect the political objectives that drive the law. We think it can do the same for laws around the world. The SAFT project is a considerable effort to formalize a framework for compliant token sales in many legal systems. Today, most of the work focuses on U.S. regulations and finding a compliant path for selling tokens (usually pre-sale before tokens are useful). We welcome – yes, the project requires – the contributions of participants all over the world. Research is the key to understanding SAFT. But you will see that this is a fairly simple concept to understand.
A hands-on Users Interoperability Communications Exercise (JUICE) is launching a process that helps utility publishers finance their project. This does not violate existing rules, including securities legislation. Despite this, utility tokens are still not considered titles. SAFT has been placed as a solution to a new problem. It should create a way not yet (ready) to sell utility tokens. A JUICE will initiate a procedure to help the publishers of a utility token finance their project without violating the rules in force, including securities laws. However, usage cancellations are not considered titles. Founders and developers use this model to raise funds for the creation or development of the system or its technology. Investors will then receive this utility je-token in the hope that there will be a commercial application case in which they will now be able to sell the tokens. Developers of a decentralized token-based system each create a recipient contract (SAFT) with their authorized investors.
The certificate includes the agreement that the investor now financially supports the project and receives tokens at a reduced rate at a later date. The company that develops the token network registers with the SEC, but does not currently issue tokens. Then, the founders and their team use the financial resources acquired to develop the network. At first, investors do not receive tokens. A SAFT is classified as a guarantee, because until the tokens are created and released, investors put their money into a business based on the hope that these tokens will be sold at a higher price once the project is more developed. This meets the most basic definition of a security: to invest in a company while waiting for future profits.