A new “light paper” released for the forthcoming KODAKCoin sale states that the token could see “significant” trading restrictions should the U.S. Securities and Exchange Commission (SEC) deem it a security.
KODAKCoin – which is being developed by a firm called WENN Digital using the brand of the onetime photography giant, and is set to form part of a new digital rights management platform – is being sold by way of a Simple Agreements for Future Tokens (SAFTs), as detailed in the paper.
Included in the paper is a long disclosure stating that while WENN Digital is pitching the token as a so-called “utility token” – which would, at least conceptually, keep it from being deemed a security by SEC standards – the company acknowledged that the U.S. regulator may make a different determination.
The firm wrote:
“While WENN Digital intends for the KODAKCoin issuable under the SAFTs to be classified as utility tokens rather than securities tokens, WENN Digital will be required to make a final determination of the tokens’ status as one or the other prior to the time that the KODAKCoin are issued pursuant to the SAFTs. In conjunction therewith, WENN Digital may decide to seek formal or informal input from the staff of the US Securities and Exchange Commission. If it is ultimately determined that the KODAKCoin are ‘securities’ for purposes of the Securities Act, the KODAKCoin will be subject to significant restrictions on resale and transfer in the absence of registration under the Securities Act unless an exemption from registration is available.”
The disclosure is a notable one, given that the SEC is said to be probing SAFTs as part of a wider investigation into ICOs.
As it stands, the exact timeline of the sale remains unclear, given recent delays, and the white paper doesn’t include any specifics on that front.
On the project’s official website, a message dated February 5 states that “the ICO is moving full-speed ahead.”
Kodak image via Shutterstock