Most likely, the second round of the 0xNIL Initial Free Offering will be canceled 😒
If you follow, even just a little bit, the cryptocurrency world, you know that the regulations scenario in the USA is a nightmare.
I talked along 2018 with many lawyers, and nobody seems to know how to handle the situation, because the institutions themselves haven’t taken a clear position.
The SEC expects that a KYC is due even if a token is distributed for free. Since the NIL has no value, the lawyers were not sure if this rule applied to 0xNIL, but nobody excluded it 😐.
As an example, take last summer DFinity Community Airdrop (more info here). Since US citizens and residents were — unsurprisingly — not allowed to participate, Dfinity was forced to know their customers to exclude Americans. Their solution was brilliant: to ask any participant to pay their own KYC. Since you can expect that a DFinity token in the future will have some value, spending $9 for it made sense. In 0xNIL case, IMO, it would not make any sense.
If this is not enough, some of the Gambling Agencies along the country expressed their own opinion about token distributions. According to a lawyer I talked to, investing your time to follow and request a token which does not have any value implies that “you are betting on future value.”
I won’t add more boring legal stuff.
It’s clear that there are two ways to complete the second round:
1) Hiring a lawyer for an average $500/hour and ask people to cover the cost of the KYC process, excluding, most likely, American citizens and residents;
2) Taking the risk of being fined, or even jailed, if some judge decides in the future that 0xNIL committed a financial crime.
Excluding obviously the second, the first one would be possible only if I involve in the project a lawyer who would work on the legalities, offering help pro-bono. I tried it but, right now, without success. So, it remains the last way:
3) Canceling the second round and unlock the NIL token.
A decision will be taken at the end of the month.
Stay tuned 👊
PS > If you don’t know what 0xNIL is, take a look at the website and the introduction post.
