As discussed in the previous article, Telegram is a popular global instant messaging company. In 2018, it sold contractual rights to acquire a new crypto asset that it was developing (to be called Grams) to a group of accredited (and wealthy) investors around the world. Telegram raised about $1.7 billion from 171 investors, including 39 U.S. purchasers. This was a prelude to the planned launch of Grams, which was to occur about a year and a half later in October 2019.
This two-step process — where a crypto entrepreneur sells contractual rights to acquire a crypto asset upon launch in order to fund the development of the asset and its network — has come to be known as the Simple Agreement for Future Tokens, or SAFT, process.
- Are the sales part of the same plan of financing?
- Do they involve issuance of the same class of securities?
- Are they made at or about the same time?
- Do they involve the same kind of consideration?
- Are they made for the same general purpose?
Carol Goforth is a university professor and the Clayton N. Little Professor of Law at the University of Arkansas (Fayetteville) School of Law.