Our Lessons Learned on ICO Governance and Regulatory Restrictions

This is a post we have been long wanting to write. In fact, it includes some lessons learned and elements that the team at RightMesh AG (RightMesh) has been yearning to share with our community since we first began the RightMesh ICO (which we refer to as our Token Generating Event or TGE) process in the spring of 2017. It is a long post, but we hope you will bear with us as we explain the journey, share our latest news, and prepare to answer your questions going forward.

Last night, RightMesh, a Swiss company, submitted the final few “exempt distribution reports” with the British Columbia Securities Commission (the BCSC) in Canada. These “exempt distribution reports” were a necessary step in the Canadian securities law compliance process of the RightMesh TGE, which included a reliance by RightMesh on a Canadian securities law prospectus exemption set out in British Columbia Instrument 72–503 — Distribution of Securities Outside BC (BCI 72–503). An explanation for the interactions with the BCSC and the use of the above-referenced Canadian securities law prospectus exemption are discussed in more detail below.

The filing of these “exempt distribution reports” with the BCSC officially concluded the RightMesh TGE process, and this means we have now emerged from an intense period of regulatory uncertainty. Because of this regulatory uncertainty, we had to ensure we fully complied with Canadian securities law to give the RightMesh TGE a better chance at being successful and withstanding regulatory scrutiny at a later date. While they may still come back with to us with additional queries, we are confident that we have fully complied with Canadian securities laws as we have in other jurisdictions and are confident in the process and steps taken by RightMesh “to do the right thing”.

Completing this process also means we are [finally!] at liberty to provide greater clarity on the pausing of the RightMesh TGE as first announced on March 26, 2018 and its subsequent restarting with the public distribution on May 30/31, 2018 and the unlocking of the tokens on June 29, 2018. This also relates to our activities (or perceived lack of activity) since that date.

Before we delve into the story of our dealings with the BCSC and the interplay between Canadian securities laws and the RightMesh TGE, it is important to state that although we are confident that we have complied fully with Canadian securities laws, and we were proactive in our engagement with the BCSC, we never received any formal declaration from the BCSC that anything we had been doing was illegal or breached Canadian securities laws. Our willingness to engage in a dialogue with the BCSC and to pause the RightMesh TGE to ensure we could take steps to validly comply with Canadian securities law prospectus exemptions before completing the TGE has been consistent with our actions throughout the TGE. In essence, we have tried to conduct the most proactively-compliant TGE possible. Not only did this make good business sense, but it was the right thing to do as it built trust and respect with the regulators and allowed us to remove a significant degree of regulatory risk for both ourselves and our contributors from the RightMesh business horizon.

Only days before our Crowd Contribution event in late March, 2018, we were approached by the BCSC who were asserting that, based on information that they had gleaned from the RightMesh website, the mind and management of RightMesh might be primarily located in British Columbia, even though RightMesh is registered and domiciled in Switzerland and over half of the RightMesh board of directors resides outside of British Columbia. The securities laws of British Columbia have a provision whereby if an issuer has a significant nexus to the Province, then, notwithstanding that the issuer may be a foreign incorporated entity, the securities laws of British Columbia could apply to an issuance of “securities” of that entity, essentially deeming it to be “a distribution of securities from British Columbia” which would require a prospectus or an applicable exemption for such a distribution to be conducted lawfully for the purposes of British Columbia securities laws. Therefore, the BCSC’s assertion, if correct, would mean RightMesh (as Swiss company) would be subject to British Columbia securities laws.

RightMesh did; however:

1. disagree with the BCSC’s assertion;
2. formally query the BCSC’s findings of facts both with respect to the “mind and management” test of the British Columbia Securities laws and with respect to whether or not the RightMesh token was even “security” for the purposes of British Columbia securities laws; and
3. query the BSCS’s jurisdiction over a Swiss domiciled entity’s issuance of Swiss “payment” tokens.

We then immediately briefed the RightMesh legal team that has advised us throughout the entire TGE process and with whom we could not have done without [thank you to MME (Switzerland), Fasken Martineau (Canada), and Shoshanna O’Brien (USA)]. They collectively advised us not to actively contest BCSC’s assertions at the time, but instead to employ the Canadian securities law prospectus exemption contained in BCI 72–503. This approach would both provide the fastest securities regulatory outcome with the BCSC and also allow us to proceed with our commitment to our community to commence the final phase of our TGE in the quickest possible time frame and with the lowest degree of regulatory risk.

As part of our compliance with the Canadian securities law prospectus exemption contained in BCI 72–503, RightMesh agreed to conduct the TGE in accordance with the following:

1. the sales of RightMesh tokens were not to be made to contributors that were resident in British Columbia (unless governed by other exemptions, such as “accredited investor” exemptions);
2. the contributor must purchase the RightMesh tokens as principal;
3. RightMesh must comply with the securities law requirements in the jurisdiction where the contributor of RightMesh tokens is resident; and
4. RightMesh must not list RightMesh tokens on any exchanges within Canada, or actively facilitate a secondary market within Canada for RightMesh tokens.

For the most part, many of the requirements were easy for the company to follow. After all, several of them also (in our opinion), most likely constitute a best practice for launching a utility token into the community. Such actions included:

1. the fact that we never promoted our token, and marketing of the TGE did not occur in any jurisdiction. All marketing was limited to discussing the merits of the RightMesh project itself and the change that it can make upon the world;
2. the placing of purchase restrictions on Canadian residents, United States citizens, and other sanctioned nations prohibiting their participation in the TGE;
3. the placing of very clear and adamant statements to the community about token exchanges in which we repeatedly stated publicly and in writing (161 times since January 4, 2018): “Regarding exchanges: Legally what we are able to say is as follows: ‘Token Liquidity: Contributor understands that with regard to RightMesh tokens, no market liquidity may be guaranteed, that the Company will not actively try to list RightMesh tokens on exchanges and that the value (if any) of RightMesh tokens over time may experience extreme volatility or depreciate resulting in loss that will be borne exclusively by Contributor.’”
4. the fact that RightMesh conducted full KYC/AML checks as well as a means check for all contributors for ALL rounds. We knew this caused angst and difficulty among contributors. Thanks for your patience and understanding on this; and
5. the fact that RightMesh avoided making many other similar everyday decisions that may seem commonplace in token issuances, but RightMesh believed were bad practice in various global jurisdictions so we erred on the side of cautious rather than act aggressively.

In fact, to meet the requirement of the securities law exemption contained in BCI 72–503 that “RightMesh complies with the securities law requirements in the jurisdiction where the contributor of RightMesh tokens is resident” we conducted additional in-depth legal analysis involving 62 different jurisdictions. This included engaging with a lot more lawyers and receiving written legal opinions from more than 27 different jurisdictions around the world.

Let me repeat that in case the emphasis was not clear: we sought formal legal opinions that the RightMesh token issuance we were proposing to conduct was not regulated by the relevant securities commissions in each of those jurisdictions and that contributors were able to participate legally. To this end, 84% of all contributors in the TGE were in jurisdictions where RightMesh had received formal legal opinion letters as to the legality of such contributors buying the RightMesh tokens. These formal legal opinion letters attested (with some variation on the theme) that, “An offer or sale of the Tokens by [RightMesh AG] to a resident in [Country] would not be regulated under securities law. Assuming the facts set forth, no, securities regulators would not have jurisdiction over the offer or sale of Tokens by [RightMesh AG] to a resident of [Country].”

These attestations were able to be made by the lawyers in the jurisdictions in question, in part, due to the conduct of the entire RightMesh team throughout the process and the care we took in our language and actions.

One irony we identified in this process is that the mere act of us talking about the BCSC and their concerns may imply to some that the RightMesh tokens may be considered a “security”, and thus would prejudice the decision based on the question itself. It is like that old statement where someone says, “Don’t think about elephants”, but once made, it is impossible to not think about elephants.

To clarify, we never received a formal determination from the BCSC that the RightMesh token was a “security” for Canadian securities law purposes, nor did we ever receive a formal determination that RightMesh “mind and management” was within British Columbia (although the BCSC seemed bullish on the latter in their verbal communications with RightMesh). Regardless, we proactively and fully complied with the securities law prospectus exemption contained in BCI 72–503 as though the RightMesh token was a “security” for Canadian securities law purposes to remove any risks or concerns that may have arisen, and to ensure as swift a resolution to this regulatory uncertainty as possible. And, in further support of our position, the opinion we received from our primary counsel, MME in Switzerland, is that the RightMesh token is not a security for the purposes of Swiss securities law but a, “Counterparty-less BCP 1 Application Token that allows participation through a payment and transaction settlement function that participants in the RightMesh Network will use to facilitate the participation in the network, whereby Users can settle transactions with regard to goods and services on a peer-to-peer basis”. The RightMesh tokens distributed in the TGE were never intended to be sold to Canadian contributors, so the BCSC’s assertion of jurisdiction on the RightMesh TGE was unexpected and ultimately moot given the ability of RightMesh to comply with the securities law prospectus exemption contained in BCI 72–503.

In full, MME’s legal opinion reads as follows:

“RMESH is a standard ERC20 Token run on the Ethereum Blockchain (Proof of Work). According to our analysis, the RMESH does not represent a relative right against a counter-party (i.e. the Company). RMESH Token also lacks any (code-based) revenue function. RMESH holders do not have any interest in a company or any other legal person, nor are the value of the RMESH derived from the profit of any legal person. The RMESH holder have no rights against a counterparty as the RMESH generator or against a third party but have only the rights built in the SCS [smart contract system].

Following the deployment of the Network, the RMESH provides both a participation right and settlement function that participants in the RightMesh Network will use to facilitate the participation in the network, whereby Users can settle transactions with regard to goods and services on a peer-to-peer basis. For example, should suppliers and Users of the RightMesh Network decide to exchange internet capacity service on a fee basis over the RightMesh Network, the internet capacity accessed by User 1 will have to be remunerated to User 2 (supplier of internet capacity) in form of RMESHs.

Hence, RMESH is a counterparty-less participation right and settlement token. According to our BCP Framework, the RMESH qualifies as a pre-operational BCP 1 Application Settlement Token as long as the Network has not been deployed on [a] Blockchain. Once the Network is up and running, the qualification changes to an operational BCP 1 Application Settlement Token.

Given the above, it was MME’s opinion that RMESH qualifies as a Payment Token within the meaning of the FINMA ICO Guidelines, since RMESH may be used as a means of settlement between the Users on the RightMesh Network for the purchase of services, for instance for the exchange of internet capacity service. RMESH, however, do not grant any relative rights against the RightMesh Network or the Company.”

We described some of the above process and steps we had to go through legally (dry as it sometimes is) because we knew the BCSC has been watching us closely over the past few months. While we had been cautious in the months leading up to the initially-planned date of the TGE, over the past few months we had to magnify this tenfold and be even more careful. As one of our founders has said previously, “We started the parent company 8 years ago, we started working on our mesh technologies 4 years ago, the idea for an ICO for RightMesh was first conceived last March, and we have a decade in front of us to change the world and the way it connects — it would be awfully foolish of us to throw that away now by doing something stupid.” Being extra cautious was, once again, the right thing to do.

Which brings us to today.

Now that we have filed the requisite “exempt distribution reports” with the BCSC and have formal legal opinions in hand stating that the TGE has fully complied with the securities laws of the jurisdictions in which our contributors are resident, we are clearly and definitively able to move onto the next chapter.

All RightMesh tokens have been distributed and the Token Generating Event has closed. Yes, we still must be judicious in making forward-looking statements as this, in our opinion, should be a de facto behavior of those involved in cryptocurrency projects just as they are in publicly-traded entities. Just because we are confident we are a Swiss “payment” token prior to transitioning to a Swiss “utility” token once operational on a MainNet, it does not mean we will change our behaviour while trying raise the bar in self-governance and transparency. Once again, this behaviour simply makes good business sense in addition to being the right thing to do.

To that end, here is our first forward-looking statement and answers to several of your questions.

Forward Looking Statements

Reader should note that RightMesh AG is a Swiss company which has not issued securities in the company as part of this TGE process. Any forward looking statements contained herein relate to aspects of the RightMesh Project and the RightMesh tokens.

Certain information set forth herein may contain “forward-looking information”, including “future-oriented financial information”, “token price statements”, and “financial outlook”, which may or may not be governed under applicable securities laws of multiple jurisdictions (collectively referred to herein as forward-looking statements). Except for statements of historical fact, information contained herein constitutes forward-looking statements and includes, but is not limited to, the: (i) Crypto economic theories that could impact the price of RightMesh tokens; (ii) the use of proceeds from the distribution of RightMesh tokens to contributors to the RightMesh project; (iii) potential use cases within the RightMesh ecosystem; (iv) planned execution of the RightMesh project’s vision and growth strategy; (v) strategy for completion of RightMesh’s projects that are currently in development or under consideration; (vi) discussion of the RightMesh project’s current customer, supplier, and other material agreements, and; (vii); details on token management practices, including any potential listing on token exchanges be they centralized or decentralized. Forward-looking statements are provided to allow those interested in the RightMesh project, including existing contributors and those interested in acquiring RightMesh tokens from others, the opportunity to understand the project’s objectives for the future as one factor in evaluating their decisions.

These statements are not guarantees of future performance and undue reliance should not be placed on them. The possession of RightMesh tokens does not grant any equity or other interest in RightMesh AG. Such forward-looking statements necessarily involve known and unknown risks and uncertainties (including but not limited to development of a market for a mesh network or demand for tokens, security of the technology, technological complexity, or that any market may exist for RightMesh tokens), which may cause actual RightMesh project performance and results in future periods to differ materially from any projections of future performance or result expressed or implied by such forward-looking statements. The company is under no obligation to share financial performance of the company. Furthermore, any description of the RightMesh platform and the functionality of the RightMesh tokens is for informational purposes only and may change as the RightMesh technology develops over time.

Although forward-looking statements contained herein are based upon what the RightMesh project team believes are reasonable assumptions, there can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. RightMesh undertakes no obligation to update forward-looking statements if circumstances or estimates or opinions should change except as required by applicable laws. The reader is cautioned not to place undue reliance on forward-looking statements.

There … with that out of the way, onto questions and issues that are of burning importance that, up until now, we have been unable to answer sufficiently:

Will you list RightMesh tokens on a bigger and better exchange?

To clarify, the first secondary markets that listed RightMesh tokens did so on their own accord. RightMesh did not solicit these listings, but we did communicate with the various listing entities to ensure the information they were portraying to their users accurately reflected our smart contract. Above all, we wanted to ensure that our users were not being scammed as this, unfortunately, remains quite pervasive in this wild, wild west.

Yes, we will engage and aim to ensure that RightMesh tokens are traded on alternative token exchanges to provide sufficient liquidity to those who hold RightMesh tokens presently as well as those who wish to acquire RightMesh tokens. Up until our final “exempt distribution report” was filed with the BCSC, we had to not just pay lip service to our statements that we were not actively promoting RightMesh on assorted exchanges. This had to be, and was, the truth. However, these actions going forward will be taken not so as to foster secondary trading of the RightMesh tokens, but to enhance utility of the overall network.

When we first identified the need to tokenize and offer the means for one user to compensate another for use of their data and device resources (back in October 2016), we were not contemplating a TGE. Back then, one of the big challenges we identified was that we needed a mechanism for a user to value the ERC-20 token being exchanged against the data being consumed vs. the cost of the data in their fiat currency. In other words, there needed to be a mechanism where a user could determine that x tokens = y MB of data = z units of local currency. This is essential to a great user experience. However, as the user does this conversion constantly between their local currency — be it Bangladeshi Taka, Brazilian Real, or Indian Rupees — and their mobile data plan, we knew we needed to provide a platform where our users could move in and out of their ‘currency’ of choice… with limited fees or friction. This is one of the many roles that crypto exchanges play in ensuring the health of the entire decentralized ecosystem.

We have mentioned before a conversation one of the founders of RightMesh had with Andreas Antonopoulos last summer regarding another issue we were having: If we had a mechanism to onboard and bring hundreds of millions of people into crypto (without many ever realizing that they were in fact using a crypto token), what we lacked was the idea to bring that user back into fiat. We asked “How could a user extract their earned value back into fiat currency if they were being excluded from current financial systems?” His simple answer of, “Why would you ever want to bring them back into fiat?” was one of the turning points of this journey.

His understanding that for our first targeted users, the emerging consumer class, their primary use within the ecosystem was to pay for other digital goods: connectivity, entertainment, education, music, etc. In other words, once a user of a RightMesh-enabled application earned in a digital form, there was no need to convert the transaction into fiat only to have them convert it back into digital currency to consume that which was most important.

There was only one problem: the mere act of hinting that a secondary market might materialize for a crypto asset could raise flags with various regulatory agencies around the world that the token’s primary function was that of a security and not of a utility within the network. It would not matter that markets existed for all sorts of other goods: Beanie Babies, used iPhones, concert tickets, airline ticket points, and so many other examples. In this new landscape, a regulator’s job is to regulate, and they were looking at applying existing rules and regulations to this new paradigm. And thus, with an abundance of caution, we did not discuss or disclose the importance an exchange will play in our future ecosystem.

However, exchanges are extremely important. In the future, we envision a decentralized exchange functionality that could exist as part of our Superpeer architecture itself, where other ERC-20 tokens (or even cross chain swaps) could be used as an on-ramp to pay for the RightMesh fuel that will drive the network offline. There is still a lot of work and research to do in this area, but that is part of the thinking.

So where does this leave us today and with secondary markets in the near future? We are in conversations with exchanges who approached us or with whom our community has provided introductions. We will not disclose the names of the exchanges as this is material information, and we are not out to start rumours.

Our community needs and deserves to have RightMesh listed on multiple, preeminent exchanges. This ensures sufficient liquidity and visibility in the market as the project evolves. Whereas we did not proactively pursue secondary markets prior to fulfilling the requirements to comply with the securities law prospectus exemption contained in BCI 72–503, we will explore relationships with such partners going forward if and when strategically important. We have worked with our advisory team on identifying the most suitable opportunities for the project, weighing multiple factors in our decision matrix including size, cost, reputation, technical abilities, geo-location, and value alignment with the project.

The word ‘partner’ is intentionally and aptly used in the paragraph above. We need to view the exchange(s) selected as a partner in this project. Are we open to paying for Exchange listings? Yes. Often, you need to invest in partnerships to receive the necessary value. There are some secondary markets that have very high fees, and thus, we will be priced out of the market for some of these partnerships in the immediate future. We do not believe it would be a prudent decision to pay an exorbitant price for a listing as the value would not support the return. Likewise, our commitment is to use contributed funds only to the purpose of the project. There are also certain exchanges that would require the project to be further ahead on our development roadmap (i.e., only possible when we are an operational BCP-1 Application Settlement Token as defined by MME). And of course, there are others that remain a bit of a black box, but which have stated publicly that value alignment is sometimes more important than fees paid to list.

Finally, as a last word on exchanges: we will still abide by the stipulations set out by the BCSC in that we will not pursue or support listing on any Canadian secondary markets. Additionally, should we engage in conversations with exchanges, we will advise them of the BCSC’s opinion that the exchange should restrict transacting with Canadians unless additional information is provided. Thank you for your understanding and patience on this as we have worked through this process.

Will you engage the services of a “liquidity provider”?

Like the conversations about exchanges themselves, this is another issue we were unable to explore or discuss throughout the RightMesh TGE and straight through to complying with our securities law prospectus exemptions and the requisite filings with the BCSC. Discussing or contracting with a liquidity provider (sometimes referred to as a market maker) implies a future speculative market, and this was something we were unable to do during the process.

As we enter this new chapter, the company has been introduced to several token management services thanks to members of our community and other advisors to the project. To clarify, we are not currently supporting a liquidity provider and we will not use the services anyone who promotes, touts, or tries to influence the RightMesh token price in one direction or another. This is not about token price manipulation. It is about ensuring sufficient liquidity exists to satisfy the needs of our community. Any activity taken must be done in a very neutral position.

In traditional financial markets, market making services serve a vital role. Within this new crypto class, their role will also be significant and required. In fact, looking at most of the other tokens that have launched over the past year, save but a few tokens, very few projects have the necessary liquidity to satisfy the needs of the market properly, creating too large of spreads in token movement prices to build a stable business.

Various exchanges offer liquidity services directly. However, we believe it is important to work with a third party who is independent and will partner with RightMesh to ensure the health of the RightMesh token economy. And as with exchanges, we believe in investing in partnerships for the long-term health of the project.

We understand the few smaller exchanges who independently listed RightMesh tokens provide limited liquidity at present. To reiterate again: we are not going to trade for the sake of trading or manipulating the token price. This is illogical. However, we do recognize that a managed token provides benefits to all members of our community.

Why this is important for the future is that as we grow the network, we will be having conversations with channel partners and publishers who will need to acquire tokens en masse to facilitate distribution of content out into the mesh be it apps, advertisements, or other forms of media. We will need to work with our distribution partners to ensure there is sufficient tokens available to meet their bulk purchasing needs. For example, imagine a media company who wants to distribute 1M apps into Indonesia where the going rate for a cost-per-install ad campaign is $0.50/install (or $500,000). To compensate the users of the RightMesh network, the publisher would need to acquire a sufficient number of tokens to take this action.

What about Marketing? Will you market your token?

Primarily, we have to focus on building: building the technology platform and protocol; building and scaling our team of engineers, product managers, and supporting roles; building our partnership funnel and channel relationships; and yes, building our community and brand awareness.

We believe the RightMesh team has done a great job over the past year ensconcing themselves within the entire decentralized community. We have become a part of the crypto scene, if you will. However, we must branch out and beyond being a crypto company and focus on being a “mesh company”. By that, we mean we must be thought leaders within a broader community and with the public at large about the transformative nature of the technology (both ours and other blockchain projects).

But the RightMesh token itself and the role the token plays within the ecosystem is something we must make more people aware of, and we will. This includes materials in multiple languages and in multiple mediums to have genuine conversations with our community and those presently not yet a part of our story. This marketing will still focus on what the technology can do. We will be continuing to participate in crypto and decentralized events to create awareness of RightMesh and our token.

While our founding team has been marketing and growth hacking technology startups for more than 20 years now, we did not, and will not, have the capacity to fully leverage this skillset as we grow. To this end, earlier this spring RightMesh’s parent company, Left, acquired another Vancouver-area company called ICO Agency, led by Joe Deobald. Joe has joined the team as Entrepreneur-in-Residence. This agency had done a lot of the branding and marketing for RightMesh in a regulatory-difficult environment, and the acquisition was a strategic move to lock up the talent required to grow and scale the project.

Marketing a crypto project is difficult at the best of times — but doing so while being severely restricted on what you can say, when you can say it, and to whom you can say it too — is at a whole other level. We remember clearly a conversation with our legal counsel about whether we were able to wear our Nodebody t-shirts to events within the United States or hand out RightMesh business cards. We were debating whether if we did these things they would be considered soliciting and thus put us offside with securities regulators. Other odd conversations involved translating whitepapers and materials into certain languages (i.e., translating into French, Italian, or Spanish may imply solicitation in France, Italy, and Spain and thus may cause issues; yet translating into Russian was not an issue based on the opinions we received). Similarly, discussions were had about our level of participation at events and sponsorships, both in regards to the type of events and their jurisdiction.

We are now onto a new chapter, and we look forward to engaging more with the community.

What about the current token price?

We believe the current token price does not reflect the value of the project. Yes, there are various factors that go into a price (liquidity, awareness, friction, etc.), yet the biggest factor will be the fundamental token economics of the network itself once operational.

In all honesty, we were probably most surprised that we did not get more questions about token economics during the TGE process. In a way, we were quite pleased that this area was not discussed much… not that we did not want to talk about it, but there were various elements we could not talk about. Once again, speaking about possible intrinsic appreciative elements to our model that may materialize could have run us afoul of various security regulators.

Saju Abraham, RightMesh’s Chief Product Officer, has often said in Telegram that the RightMesh token is the fuel that powers the entire network. As a payment token, it delivers utility to those in the network and allows them to pay for services provided by other network participants be they connectivity, device resources, sensor information, or digital goods made available on the network itself. However, one key element often overlooked by many is the role the RightMesh token plays with a RightMesh Superpeer.

Thus, while we do not have a token burning mechanism at play, as the network grows and more mesh nodes are created, there will be greater demand for staking tokens on the Superpeer. This has the effect of slowing the velocity of tokens down considerably, removing tokens from active circulation. A mesh network, meanwhile, has intrinsic network effect properties. With every subsequent node of the mesh created, the value to the existing users grows as well, increasing the value of the network for all. More users equals more demand, more demand equals more mesh density, more density equals more network value. More users also means more staking required to facilitate connectivity between the users. Thus, more staking equals less available supply of RightMesh tokens.

We have been working with a highly-respected and qualified crypto economist, Rogayeh Tabrizi, to model out how tokens flow within the network, and we should be sharing more information about this over the coming weeks.

But even stating all of that, our focus has to be on building as much network value as possible. While network value should be reflected in token value, as an organization, our priority must remain on delivering a strong, healthy network used by hundreds of millions of people. When we do this, the token price will accurately reflect the project.

Can you talk about team token trading and policies?

We have an internal team token trading policy that we will be publishing for our community’s review soon. This does not address the locking and gradual release of team tokens that lasts for 2 to 3 years, depending on the recipient. Rather, the team token philosophy governs the buying and selling of tokens by insiders of the company.

This is another one of those issues that up until today we were unable to discuss with external audiences. The mere act of talking about such a philosophy may have indicated that we were encouraging a subsequent market for RightMesh tokens to materialize.

A few points we should mention in advance: insiders (such as employees) have various blackout periods in which they are unable to buy or sell RightMesh tokens (in addition to timelock periods preventing token sales presently). For the past few weeks, if anyone was privy to material information, they were ineligible to purchase RightMesh tokens on any exchanges that currently list the project.

Furthermore, in order for RightMesh insiders to avail of a further securities law prospectus exemption on resale of their RightMesh tokens, RightMesh has to ensure that Canadians were unable to hold more than 10% of total outstanding RightMesh tokens at any time. To comply with this securities law prospectus exemption, even in advance of any action being taken or any determinations being made, and to take advantage of the exemption pathway this provided for insiders of RightMesh holding RightMesh tokens, compensation plans and packages for many team members were refactored. This allowed us to ensure that upon first issuance, less than 10% of the RightMesh tokens outstanding were held by Canadians. In other words, even if team members were wanting to acquire tokens on any of the existing exchanges, with knowledge of this provision, they would be unable to as this could have put us offside on this requirement.

Conclusion

As a final thought, we should also state we do not begrudge the regulators at all. In fact, we applaud their efforts in working with us to bring this project further along. We have said before that a “regulators job is to regulate”, and we had to respect and work within the rules as currently created. Our behaviour and respect for the rule of law (in all jurisdictions) will not waver. While no action was taken towards RightMesh by any regulator in any jurisdiction, we are confident we have complied fully with everything as best we could. RightMesh is a Swiss company, but we are a project for the world.

The year itself has been frustrating on some accounts, but really rewarding in others. One of the most frustrating parts was the inability to tell the full story to our Community who has supported us. While some members have been threatening and negative in their tone and comments, most of the community has understood fully that we are trying to build something of real and lasting value. To these supporters, thank you for your patience and understanding.