After the ICO craze of 2017, such offerings have raised extremely little so far this fall, with total sales in October down 94% since February, according to Token Data. Why? And where to next? Andy Bromberg, president of CoinList, and Marco Santori, president and chief legal officer of Blockchain, discuss the changing nature of token sales. Andy reveals how the projects approaching CoinList have changed over the last year, how investors are changing their approach to due diligence in the space, and how CoinList complies with various regulations. Marco explains the origin of the SAFT framework, what laws would apply outside of securities regulation and why rulings in civil lawsuits and no-action letter are likely the next way we’ll get regulatory clarity. We also discuss why the Civil token sale failed, why airdrops could be a better than ICOs for seeding usage on networks and how to figure out which wallets to target in an airdrop. Plus: Marco and Andy disagree on one aspect or how regulation could apply to airdrops.
Thank you to our sponsors!
WeTrust: Donate in crypto and have your donation matched by WeTrust through Giving Tuesday, November 27! http://wetrust.io/unchained
Abra: Click this special link for a free $25 in Bitcoin! https://www.abra.com/unchained
Episode Links
Andy Bromberg: https://twitter.com/andy_bromberg
CoinList: https://coinlist.co
Marco Santori: https://twitter.com/msantoriESQ
Blockchain: https://www.blockchain.com
Autonomous Next data on September ICOs down 90% since January: https://next.autonomous.com/thoughts/crypto-september-icos-90-down-from-january-but-venture-funding-is-ray-of-hope
Token Data on October ICOs down 94% since February: https://twitter.com/TokenData/status/1057953301440983040
SAFT project: https://saftproject.com
Previous episode with Marco and Joshua Ashley Klayman including her concerns about the SAFT framework: http://unchainedpodcast.co/how-crypto-and-blockchain-technology-should-be-regulated
SEC Director of Finance Bill Hinman’s comments that ether is not a security (5:25): https://finance.yahoo.com/news/sec-announces-ether-not-security-162658147.html
Jay Clayton’s comments that every ICO he’s seen is a security: https://www.coindesk.com/sec-chief-clayton-every-ico-ive-seen-security/
Civil token sale: https://tokenfoundry.com/projects/civil
Blockchain’s Airdrop program: https://www.blockchain.com/airdrop
CoinList’s Airdrops program: https://airdrops.coinlist.co
Transcript Below
Laura Shin:
Hi, everyone, welcome to Unchained, your no-hype resource for all things crypto. I’m your host, Laura Shin. If you’ve been enjoying Unchained pop onto iTunes to give us a top rating or review that helps other listeners find the show.
Here’s a pause for the ads.
The topic for today’s show is, what has happened to ICOs? Here to discuss are Andy Bromberg, president of CoinList, and Marco Santori, president and chief legal officer of Blockchain. Welcome, Andy and Marco.
Andy Bromberg:
Thanks for having us.
Marco Santori:
Thank you. Happy to be here.
Laura Shin:
I initially had the idea to do a show on the changing nature of token sales a few months ago but even at that time I feel like the token sale landscape looked a bit different. While the market was quieting down it didn’t seem as moribund as it does now just two months later, and for various reasons at the time that I had the idea the scheduling of a show on this topic was delayed, and so while I was preparing for this recording I was reviewing these different stats on the token sales, and it just looks like the air has really gone out of this market.
Autonomous NEXT has ICOs down 90 percent in September from January. Token Data says that ICOs are down 94 percent from February which is when ICOs raked in about 2.6 billion dollars to October when they only raised 198 million. And while this year has still been huge, there’s actually been 12 billion dollars raised via ICOs in 2018, and that’s against 6.5 billion in 2017, much of that just happened in the first half of the year.
So that’s kind of where I want to take our discussion, but before we dive into how last year’s craze has deflated so much let’s first do intros on both of you and your backgrounds. Andy, why don’t you start? What’s your history with crypto and what does CoinList do?
Andy Bromberg:
Yeah. Sure thing. So my history with crypto started back in 2012/2013. I cofounded the Stanford Bitcoin Group with a bunch of other folks there and we were led by Balaji Srinivasan who is now the CTO at Coinbase and formerly the CEO at Earn.com. At that point we did a bunch of early research and development around mostly just Bitcoin at that point because this was 2012/2013, there were not a lot of other tokens out there, but spent a couple of years doing that while I was in school, and building projects, evangelizing, and doing academic research on the space.
I left and started a company called Sidewire in the media space in 2014 and then last year started CoinList with the rest of the team.
CoinList is a platform where the best digital asset companies manage their token sales and airdrops and we’re really aiming to build the future of financial services for the digital asset economy serving both issuers and investors and also users of these decentralized networks and making sure that this digital asset economy can grow the way that we think it will.
Laura Shin:
And Marco, how about you? How did you get into crypto and what do you do at Blockchain?
Marco Santori:
I got into crypto in 2012 when I helped some clients form a currency trading fund, and they weren’t really doing anything particular interesting but they’d joke with me that they were trading Bitcoin, and back in 2012, you know, that was a joke, and now it’s quite far from a joke, but word got out that there was a lawyer in crypto, and then they referred somebody to me and they referred somebody to me and so on and so forth until I joined the Bitcoin Foundation as the chairman of the Regulatory Affairs Committee, and Bitcoin Foundation is by all accounts no more, but since then I’ve been a partner at Cooley and a partner at Pillsbury, two global law firms, and now I am the chief legal officer and president here at Blockchain.
Blockchain is the world’s largest platform for digital assets, just about 30 million wallets all around the world, and we focus here as an institution on use and functionality of blockchains and crypto and blockchain tokens and anything else weird and interesting that might come down the pipe.
Laura Shin:
Andy, CoinList launched about a year ago. What was your mission at the time and how has that changed over this last year? I couldn’t help but notice that…like, I know your website I think says something about being a platform for doing compliant token sales, but when you were describing what CoinList does you said something about offering financial services broadly in this space. So I didn’t know if that mission has changed.
Andy Bromberg:
Yeah, it’s an interesting question. For us I think the mission hasn’t changed. From the beginning we’ve wanted to provide this future of financial services for the digital asset economy. What has changed and I think what we’ll talk about here today is what that looks like on a tactical level for these projects, and as the ecosystem evolves they’re going to need different subsets of the overall market for financial services. I think in the early days that was very focused on purely just ICOs, and so we were really focused on just running compliant token sales for these projects, and as the ecosystem has matured and as our company has matured alongside it we’ve started to offer more services.
So we certainly still work with top digital asset companies on managing their token sale and how we can facilitate compliant token sales, but we’ve now added capabilities around airdrops, we’ve really honed in on a white labeled compliance product, we’ve got big plans for an exchange coming up down the pipeline, and so I think that market will continue to expand. These issuers as they progress in their life cycles will need more and more services beyond just that fundraise, the moment of inception, they’ll need a lot of other services to help support their networks as they go live and begin to gain usage and functionality, and we aim to serve that whole life cycle for those issuers.
Laura Shin:
And I know you really work with only the tiniest handful of projects that actually apply to do a token sale with you. Can you walk us through that process that you use to whittle it down to those handful that you’ve actually decided to work with like Filecoin, Blockstack, etcetera?
Andy Bromberg:
Absolutely. Yeah. So for context, we have publically worked with five token sales in the past year out of about 2,500 inbound, and that’s not a bandwidth problem, that’s a question of diligence for us. Those sales were Filecoin, Blockstack, Props, Origin, and TrustToken, and we also publically worked with Dfinity on their 35 million dollar airdrop earlier this year.
But when you think about what diligence an investor should do on a token project it’s kind of the frame of mind I think we use when we’re evaluating who would be a good customer for our platform on the issuer side, and that criteria starts with all of the standard criteria that you would evaluate if you were evaluating a venture investment, if you were making a seed round bet or a series A bet in a tech company.
So that’s looking at the team, the product that they’re building, the market they’re going after, and the deal terms. I think those four pieces are really the foundation of any venture bet and should be the foundation for a token bet too, and it’s staggering to me how many investors in the space ignore one or more of those diligence items when they’re evaluating a deal in the space. They either ignore kind of who the team is or they don’t look at the deal terms closely or they don’t think about how big the market can get, and so we go through all four of those team, product, market, and deal terms in great depth when deciding who to work with.
But then I think there’s two more things that are specific to the token industry that you don’t look for in traditional startups that I think are important for us to dig into, the first is the legal structure that they’re raising under. When you raise a seed round or a series A round of traditional equity sure, everyone’s dots are a little bit different, but few people are actually innovating on how to structure a seed round, and in the crypto markets there is a lot of innovation, a lot of differences in how people legally structure these agreements that they’re selling, and we dig really deeply into that to make sure that we’re comfortable putting them up on our website and suggesting that people may want to invest on them before we do so. So we dig into the legal structure that they’re raising under.
And then the last piece is the token economic model. So this isn’t the deal terms that they’re raising on but it’s a question of the internal economy for that token. Token networks are all about incentives and how can you use a decentralized network to encourage all these actors to act in the right way and discourage attackers from coming in and hurting the system. We really have to make sure that the economic incentives within that token network are appropriate and encourage the right behavior and discourage bad behavior.
That’s a place where when we look at these projects we of course cut out a whole bunch of scams and frauds and bad actors, but the hardest ones for us to say no to are the ones where it’s a great team, they’re building a compelling product, they’re attacking a big market, it’s legally structured well, but then we look at it and say we just don’t think that this token is going to accrue value in the long term or that the participants in the network are appropriately incentivized to do the right thing, and so we don’t think this network is going to survive and thrive in the long run once it’s live. And even for teams that are building a great product with great backgrounds, attacking a big market that’s a stumbling block often at the end.
So that’s how we’ve gotten from 2,500 that have approached us about running a token sale to the five that we’ve worked with publically, is by looking through all of those kind of six criteria.
Laura Shin:
Wow. That’s super interesting. I would imagine for the last point you could actually start to offer some sort of service where you do help some of the teams work out their tokenomics, because I know for instance some of the crypto funds, that’s a big part of what they do for their portfolio companies, but actually before we…I don’t want to go further into that.
I actually wanted to ask you, when you were talking about the novel legal structures that some of these teams are trying to use, what are some examples?
Andy Bromberg:
Right. So I think we’ve got perhaps the expert on this podcast as well.
Laura Shin:
That’s true.
Andy Bromberg:
Marco helped to structure the original SAFT, the Simple Agreement for Future Tokens, and I think almost every instrument we’re seeing now that is someone selling tokens, whether or not they’re calling it a SAFT or using the exact document that Marco drafted for that original piece, is taking some of those core ideas, and almost all of them are doing something where they’re selling something as a security. They’re selling a piece of paper that represents future ownership and at some point that will output tokens that in many cases are intended to be non-securities in the future, and that general frame is something that I think Marco really innovated on, he’s the one who can speak deeply to that, and almost all of the sales we see are using something that relies on that sort of logical sequencing, and then all the details are different for every team, and people are thinking about how they should structure it for their own token network and make sure that it works appropriately for them, but nearly all of them are derivatives of that concept.
Laura Shin:
That’s interesting. Yeah. We’re going to get into the SAFT a little bit in a second, but actually I just want to ask you a few more questions about CoinList. I’m so curious, like you were talking about how much inbound you guys have had, but do you see that decreasing? Like, is that down from the beginning of the year or from a year ago?
Andy Bromberg:
Great question. I would divide the market into two submarkets. There was a massive number at the end of 2017 and through early 2018 of low quality projects that saw this ICO boom and said, “Let’s go do it. We see free money floating around there, let’s go grab it and get some of this investor capital into our business,” when their tokens were not high quality, they didn’t even need a token, scammers, fraudsters. So in terms of raw numbers we have absolutely seen a decrease in inbound projects from last year to this year, even beginning of this year to now.
What we haven’t seen is a decrease in high quality projects. Actually on the contrary, we’re talking to more high quality projects today than we ever have been in our history, projects that we would actually feasibly consider running a sale for. I think that’s just a function of the industry maturing. There was a really, really low signal to noise ratio in the early days of the industry, specifically the ICO industry, and that’s changing, and a higher and higher percentage of projects that we talk to are well intentioned, feasibly high value projects that we should consider working with.
So absolute numbers, definitely down from previous months or previous year, but in terms of high quality projects we are probably net positive from where we were before.
Laura Shin:
Oh, that’s interesting. That sort of makes sense in a way. Like, the stats that I quoted in the beginning, it’s like all that money flowing in was the people who just wanted in because of FOMO and because it was a bull market, and now that it’s a bear market the people that still want to do this are the ones that actually have something real to do and aren’t just trying to make money quickly. Is that sort of…
Andy Bromberg:
It’s tougher to make a quick buck when you’re in a bear market, so absolutely. I think a lot of those folks that were looking at this with money signs in their eyes are now realizing that now is not the right time for them to chase after that investor capital, and this goes along with a big trend of investors getting more sophisticated about how to diligence these projects.
A year ago people really had no idea…ICOs were functionally brand new, at least in their modern form, and investors, most of them didn’t know how to diligence the project. With every month that goes on and every project that they see they get better, and we’re now reaching a point where investors are really sophisticated about how to do diligence and that means it’s way harder for these low quality projects to raise the capital they want to raise.
Laura Shin:
Okay. So before I return to Marco just the last couple of quick questions I want to understand about CoinList, so as far as I understand you treat your sales as sales of securities. Is that correct?
Andy Bromberg:
Generally. So we think that Chairman Jay Clayton of the SEC has said a number of times he has yet to see an ICO that isn’t an offering of securities. We tend to have the same perspective. We think it’s theoretically possible for a sale to not be an offering of securities but we have not worked with any yet that we’ve treated as such, and we’re eagerly awaiting increased clarity from the regulators and from the government more broadly about if and how that may be possible, but for the time being we’ve taken the conservative stance that yes, all of these offerings have been offerings of securities.
Laura Shin:
And so for that reason you do what traditional know your customer, anti-money laundering process?
Andy Bromberg:
That’s right. So investors in CoinList sales go through know your customer and anti-money laundering due diligence, and also go through a true securities offering. So in most cases for the token sales that we’re running, and this is different from airdrops, we can talk more about the difference later, but for the token sales we’re running they’re almost always exempting their sale of securities under either Reg D or Reg S which are different exemptions that the SEC offers for sales of securities that carry with them different requirements on how you diligence those investors.
So most investors in CoinList sales thus far have actually been accredited under the US definitions. They’re worth a certain amount or they have a certain amount of income or they fall under some other international regulation under Reg S. We can get into the nitty gritty if it’s interesting, but at its core, yes, we do KYC, we do AML, and then we make sure that they meet the criteria outlined by whatever securities exemption that issuer is using.
Laura Shin:
Okay. So yeah, let’s now turn to Marco, and let’s discuss the SAFT that Andy mentioned. Maybe you felt quite vindicated to know that a lot of the teams that Andy is working with definitely still want to use that because certainly you were instrumental in at least formalizing that structure. I don’t believe you invented it, I think actually just some of the crypto funds that were investing in the space even all the way back in 2016, they I think adapted it from what was known as the SAFE from Y Combinator, but SAFT stands for Simple Agreement for Future Tokens, and you had published that white paper about it. So why don’t you explain what the SAFT is and how you thought it fit within existing securities laws.
Marco Santori:
Yeah, and we’re actually about a year out from when we published the SAFT, maybe a little bit more, when we published the SAFT project white paper. You’re also right in that we did not invent the SAFT. I think that honor goes to the folks at Polychain or one of the other West Coast crypto hedge funds, and they had taken the Simple Agreement for Future Equity and replaced instances of equity with token, and went on their merry investment way, which as we just heard from…
Laura Shin:
Don’t try this at home, kids.
Marco Santori:
As we just heard from Andy there are some pitfalls there. There can be pitfalls there. So what we did with the SAFT project was to take a look under the hood of this thing and sort of test whether it could work and if so how, and we concluded that in fact it can. We think that it can work, but not in all circumstances and not for all offerings, and there are some places where it’ll never work, some circumstances under which it’s just never really effective, it can’t improve the situation.
But there are many circumstances, in fact we found most of the circumstances where if you’re considering doing an ICO, and initial coin offering or what we called in the white paper a pre-functional sale of utility tokens, we thought that thing is probably a security, you’re probably creating a security when you execute that sale, and the best way to do that is with a security instrument like a SAFT and following the securities laws like Reg D, as Andy said, or Reg S, Regulation D, Regulation S, the SEC rules.
So the effort was really sort of a self-regulatory response to ICOs, and we’re about a year out now, and we’ve seen what the effect of that was, there really aren’t any more ICOs, in the United States at least, and the market has moved to applying the investor protection rules at the stages when that’s appropriate, and the next phase that we’re going to see if my calculations are…if my calculations are correct the next stage that we’ll see is people starting to apply the consumer protection laws when these tokens are functional or as Bill Hinman at the SEC said, once they are decentralized or at least sufficiently decentralized such that really the risks are more like consumer protection risks than they are investor protection risks.
Laura Shin:
And so just to actually go back to what you were talking about in the beginning of your answer, you said that you thought the SAFT applied or could help things in certain scenarios but there were others where it would not improve things. What’s an example of when using it would not improve the situation?
Marco Santori:
Yeah, so I can give examples of both, and if you’re interesting in really reading in depth you can go to saftproject.com and download the white paper and you can really dive in or really just read the abstract. It pretty much encapsulates the whole thing.
But there are these circumstances where a SAFT or at least applying the SAFT framework makes sense, and that is when the purchasers of this thing, of whatever you’re going to be selling, when they’re mostly reliant on your efforts as the creator or the developer, when they’re mostly reliant on you still expending your technical and managerial expertise to imbue this token with functionality and value. That’s a security-like relationship, there are investor-like risks there for the purchaser.
Just like Andy was saying, you know, what should you look at when you’re investing in a token? Well, that’s an important sentence, right, when you’re investing in a token. If you’re investing you should be looking at all the things investors look at so naturally it doesn’t take a genius to think well, maybe the investor protection rules should apply too, and that’s the position we took in the SAFT project white paper.
But we also say that there comes a time after the developer has already expended its technical and managerial expertise, when the thing is this functioning good in commerce, some people have called it a consumer good, that really we just need the sort of traditional anti-fraud rules that somebody like the Federal Trade Commission, the FTC, might enforce instead of the SEC.
So when would you use a SAFT? When the thing that you’re selling has investment-like risks, before it’s functional, or as the SEC has said, I keep saying this, but it’s Bill Hinman, the director of the division of corporation finance at the SEC, as he said, when the thing is not yet decentralized, when you’re still really reliant on the efforts of the issuer. If you’re going to take people’s money you should probably be using a SAFT.
But if that’s not the case, if you’ve been working long and hard on this thing and it works and people can use it independently of you and if they’re buying it as an investment, their investment will increase in value independently of you, then what you’re selling is unlikely to be a security and there’s really no reason to use a SAFT.
Finally, there’s the circumstance when none of that really matters because what you’re doing is tokenizing an investment. So we call those tokenized securities which is to say stock in your company. You want to write that stock certificate into a blockchain or a smart contract instead of writing it into a certificate, like a paper certificate or Carta or one of those systems. If it’s just a security anyway and it’s always going to be a security just sell the thing like a security. There’s no need to follow the SAFT framework. The fact that it’s written onto a blockchain instead of a piece of paper or a centralized database is not going to change anything.
Laura Shin:
And earlier you sort of hinted at perhaps an answer to this question but I just wanted to ask it directly, how do you think the SAFT framework has aged since you wrote that white paper?
Marco Santori:
Well, I think it’s become a market standard. It is just what people do now in the United States. You know, Andy would be able to…he’s there in the trenches, he’s the one seeing these deals, he would be the one to keep me honest here, but based on what I’ve seen at least in the United States people are following the SAFT framework with documents that may or may not be called SAFTs across the top of them, and what they’ve done, thankfully, is adorned the document. They have added bespoke terms that allocate risk and protect investors or protect the issuers in some cases. The document itself has matured, the framework is applied pretty rigorously.
Laura Shin:
Yeah. People who missed an episode I did with…I’m actually just blanking, Marco, was it you and Joshua Ashley Klayman?
Marco Santori:
Yeah. It sure was.
Laura Shin:
It might have been the two of you. Yeah. Yeah. Yeah. Yeah. I’ll link to that in the show notes because Josh mentioned a few objections. She had contributed to a paper that came out after your SAFT white paper where a bunch of lawyers I guess wrote kind of the areas in which they took issue with what you had proposed, but as you mentioned, I do think also even what you had written back then obviously has evolved over the last year, but you did reference Hinman’s speech, and I wanted to ask you, do you feel that your view or what you proposed in the SAFT framework, that that was vindicated by his remarks where he said that Ether is now sufficiently decentralized for it to not be a security although he kind of implied that it probably was at the time of the Ethereum ICO?
Marco Santori:
Yeah. Look, I wouldn’t go…so a couple of things. One, SEC doesn’t validate anybody and they certainly didn’t go out of their way to validate our work on the SAFT project framework. And second, I wouldn’t go so far as to say that Hinman said that the Ethereum token sale created a security, but I will say that he did distinguish between the sale of the token, so the instrument that achieved the sale of say Ether which was a contract, it was a paper contract written on the website of the Ethereum Foundation, and then the token that was eventually issued subsequent to that transaction, he makes the distinction between the security and the token that comes out as a result of the security which is precisely how we see the SAFT.
In terms of…look, in terms of validation and whether the SEC agrees with me or not, I will just say this, reading it, the document, the speech, pretty clearly said that something could potentially transform from a security to a non-security, specifically called out agreements that were reliant on that theory and said they could work. So you know, it wasn’t a validation of the work that we did, but there’s no question that the work that we did is in harmony with the position that was taken in that speech.
I will say though, that SEC added an extra layer. They said yes, functionality, which is of course the core concept of the SAFT project framework, they said yes, functionality is important and it’s one of these factors that gives rise to something else, something greater than mere functionality, which Marco, you said was sufficient. There’s actually more to it. It’s not just functionality like you said in your white paper, it’s this notion of decentralization which takes into account additional factors.
Laura Shin:
Yeah. The whole thing is super interesting. I actually, though, have a question now for both of you. A lot of people were saying at the beginning of 2018 that we needed regulatory clarity from the SEC on different aspects of token sales. So you feel like those issues have been resolved, and if so which ones, and what questions remain?
Andy Bromberg:
Yeah, I can jump in on this. I think to me there were really two questions. There are a lot of regulatory questions in the token space, but specifically with regard to the securities law questions I think there were kind of two in sequence that needed to be answered. The first was, is it possible for something to start as a security and eventually become a non-security, or alternatively presenting to be sold as a security and eventually output something somehow that is a non-security, basically the premise behind the SAFT framework. And then the second question was if so, how and when, and how can you decide when something is not a security?
I think the answer to the first question at least in informal discussions from the SEC, like Hinman’s speech, has been yes. So to me I’d agree with Marco, the SEC doesn’t validate anyone, but that certainly seems in harmony with the SAFT framework and the ideas proposed there. Yes, it is possible for something to start as a security and output something that is a non-security.
Just one thing on that, I think the simplest way you can see that is by putting Jay Clayton’s statement, I’ve never seen an ICO that wasn’t an offering of securities, next to Bill Hinman’s statement that he doesn’t think Ethereum is a security, I can almost guarantee that Jay Clayton has seen the Ethereum ICO, he’s looked at that as kind of the beginning of this whole trend, so those two next to each other make me feel like yeah, the answer to that first question is yes, this is possible.
Now, the second question still remains and we got an ounce of clarity from that Hinman speech, but when is this possible? How does something make this transition? How do you draw that line? That’s the piece where I think we would still love to see some clarity.
Now the thing to remember there is that securities law and especially this specific determination will always be what’s called a facts and circumstances based analysis. So it’s unlikely that they’re going to give us an incredible quantitative set of definitions where if X, Y, and Z are true it is not a security, if A, B, and C are true then it is a security, but some more clarity around what does it mean to be sufficiently decentralized? How can we actually make that determination? That’s the piece where I think we’re awaiting more clarity.
Whether that comes in the form of a specific project petitioning for some sort of no action letter and specific relief or it comes from the SEC making statements about what might lead down that path, that’s the place where we’d still like to see, but it’s at least comforting that their public statements have been in harmony with the framework that, like Marco said, has become industry standard and people are operating under.
Marco Santori:
Yeah. I tend to agree. I think that we do have clarity around the first issue, which you know, lawyers looking at this closely even at the outset knew that this was framework that could work, but when we got clarity from the SEC I think we all breathed kind of a sigh of relief. It was somewhat short-lived in that we still don’t have open and…we still don’t have a quantitative approach to determining decentralization or that point where you can actually launch and sell your token as a non-security, or you can resell your token as a non-security, or deliver the token to investors for them to sell as a non-security.
I don’t think we’re ever really going to have that. I think that the SEC gave us actually quite a bit of clarity in the Hinman speech and the next thing to come won’t come from SEC. I think the next bit of clarity is probably going to come from the courts. There are a number of civil lawsuits by private plaintiffs as opposed to the SEC, a public plaintiff, where people stand accused of all kinds of things, but the causes of actions are all under the securities laws. So the first thing the court is really going to have to determine is which law applies, is it regular old consumer protection law where you shouldn’t lie to people and you shouldn’t falsely advertise, or is it this very heavy weight set of rules to protect investors, the securities laws?
I think that we’ll probably start getting more clarity from the courts there and then we’ll also see that mixed in with no action letters based on applications to the SEC for clarity in very specific cases. So we’ll start to see like, a patchwork of guidance start to emerge.
Laura Shin:
Super interesting. We’re going to take a break from our sponsors and after that we’re going to discuss things like the failed Civil token sale and airdrops and more.
Here’s a pause for the ads.
I’m speaking with Andy Bromberg of CoinList and Marco Santori of Blockchain. So just to wrap up this discussion around SEC and tokens and token sales, I feel like I’m hearing that sort of the next stage of getting more clarity is around how do we define whether or not a network or a token is sufficiently decentralized, and perhaps we might get that clarity through some of the civil suits, lawsuits, and also maybe we’ll see instead of SEC enforcement we might see enforcement from the FTC. Is that kind of what you guys are saying?
Marco Santori:
I wouldn’t go so far as to expect enforcement activity from the FTC. That’s more of a wish list like item, because if you look back on a lot of the controversy over the last couple of years around SEC’s involvement in the space one of the big questions that sort of looms over every discussion is, well, SEC in some of these cases goes to lengths to establish jurisdiction and explain why they think that this token or this transaction involves a security and not a consumer good.
Well, where is the FTC saying well, these transactions involve consumer goods and not securities? I think that the FTC is hanging back and they’re sort of watching the SEC do the SEC’s job. I think there’s a risk that it may be resulting in over-inclusion. It might be a risk that there’s really nobody pushing back and saying, well, actually this is not in the SEC’s jurisdiction, this should be in the FTC’s jurisdiction.
But realistically I don’t expect that to happen. It’s more of a sort of retrospective comment than anything.
Laura Shin:
And then earlier when you were talking about the court cases, are there any particular ones that you’re watching, and if so which issues do you expect them to resolve?
Marco Santori:
There are several that I won’t mention due largely to my much longer career as an attorney in private practice and representing some of those people in other matters, but I think the very first questions that we’re going to get answered is, well, what law applies? Is this thing a security? Does securities law apply? And that’s the same question that Andy was asking earlier, is when do these things become consumer goods and are no longer investments?
Laura Shin:
Andy, are there any particular cases you guys are watching if Marco is not going to answer that question?
Andy Bromberg:
Yeah, unfortunately I’ll have to decline that one for similar although obviously non-legal background reasons.
Laura Shin:
Okay. Well, we’re going to talk specifics at least about this one token sale which was Civil. That was actually one of the more talked about ICOs of late, maybe because it was a journalism platform, and so maybe the media took an interest in the blockchain coming to their own industry, but unfortunately the sale failed pretty undeniably. They aimed to raise between eight million and 24 million but instead they only raised 1.45 million, and 1.1 million of that came from Consensus, so that means only 350 thousand came from the crowd.
They had actually used Token Foundry to conduct their sale and for listeners who don’t know much about Token Foundry, they had kind of an interesting way of holding ICOs that at least as far as I can tell they had designed to deter speculators. Buyers had to pass a quiz to ensure that they understood what they were buying, and they had to even like, promise to participate in the network because they literally were not able to sell their tokens until after they had used them.
So Andy and Marco, why do you guys think the Civil token sale failed?
Andy Bromberg:
Yeah, on the civil token sale, without, you know, wanting to say much about the team or anything like that, I think it’s an interesting project.
Fundraising is fundraising and I think attracting interest is often correlated to how you structure the sale and how you put it together, but at the end of the day it’s a matter of pitching investors and selling them on a vision that they want to invest in. I don’t put too much stock into some of the justifications I’ve heard that that sale failed for structural reasons, you know, that the quiz deterred people or that you know, they had issues with the actual structure. I think the issue was just around their ability to close investors, and there have been a lot, in fact the vast majority of token sales that have gone out to raise money in the past year have failed to hit their targets, and I think this is just an example of that.
Separate from that I think we also have some real questions about the manner in which that sale was conducted and how compliant it was and how they went through structuring the sale, but I actually think that’s a totally different conversation from why they were unable to raise money which I think is purely a question of just ability to fundraise and doesn’t have as much to do with anything more systemic.
Laura Shin:
Although the one thing I will point out is from what I can glean I think they had some sort of restriction so that whales wouldn’t be able to buy in, and I don’t know for some of the bigger sales what kind of roles whales did play, but I do imagine at least for some of the sales, like I can imagine Basic Attention token is probably the easiest one that comes to mind where they raised 32 million dollars in like, two minutes or whatever, and it was only like, 217 addresses that got tokens, and that was just because these whales did swoop in to buy a bunch at once. But I wonder if Civil almost went too far in trying to tamp down speculation.
Andy Bromberg:
Right. If you do the back of the envelope calculation with an ambitious goal to raise tens of millions of dollars you’re likely going to need some big investors. There are not that many investors in crypto right now relative to other industries, and so if you’re going for smaller investment sizes, people investing 100 or 500 dollars, you need a lot of those people to get to even five million dollars, right, and there’s just not that many investors in crypto today compared to other industries.
So if you’re aiming for raising tens of millions of dollars you’re going to need some large checks just as matter of getting to a world where that capital comes in, and I think that speaks to some of the differences how we’re seeing token sales evolve, some people separating out the goal of raising significant capital from the goal of distributing their tokens to a wide audience, and we can talk more about what that means, but yeah, when you do the math you almost certainly need some large investors if you’re going to end up having a token sale that raises tens of millions of dollars.
Laura Shin:
Yeah. The one thing I would say is that as I was researching this it did occur to me that 350 thousand was nothing to sniff at back in the day when crowdfunding was done via dollars on Kickstarter. So I think it just depends on your perspective, right? It’s like, now in the world of ICOs where with digital money it is so much easier to raise a lot it does seem small, but I remember…what was it? I don’t know, there were just Kickstarters where if you raised more than 100 thousand people would feel like, oh, yeah, that was successful. So.
Marco, did you want to add anything about why you think Civil didn’t hit its target?
Marco Santori:
This is an incredibly dangerous intersection of a token sale I don’t know a whole lot about and a token sale that was conducted by some people who actually tried really, really hard to do the right thing vis-à-vis the securities laws. So my opining on it is, like I said, a little bit of a minefield, but it’s actually kind of fascinating from a legal perspective and also from just a practical perspective.
When I was in private practice as you know I advised on a number of large token sales, and they were almost all SAFTs, but one of the sales that I advised on that was not a SAFT actually had a built-in mechanism, a use it or lose it mechanism, and the idea was that look, once you have this token you absolutely cannot sit on it. It is not investment grade, it just doesn’t make any sense to buy this token and then expect to hold onto it and not use it and then resell it for a profit. It failed the Howey Test pretty hard which is to say it was not a security, it was not an investment contract.
So when I look at Civil and I see that they put in similar mechanics it actually warms my heart. I think that that is the correct approach if you believe that there is enough activity out there from people who were buying this thing primarily to use it.
And now that the tide has gone out in the market I think we’re all a little bit disappointed to find that there’s actually quite a bit of speculative activity going on, and what’s worse, when I look back on what the SAFT framework’s widespread adoption has done, I’m not sad that it killed the ICO, I think we wrote in the paper that we didn’t think that was a very good mechanism for distributing tokens and raising money, but I am disappointed that really it sort of amplified the advantage that accredited investors and professional money has had and still has over retail, over retail investors in that so many accredited investors would jump at the chance to buy tokens at a discount only to dump them on retail investors.
So what we saw was an attempt to flatten out that advantage, to eliminate that edge, and I commend it. I think as Andy said, the timing was tough, and then there’s just the question of do I believe in this project, and that’s a question that every investor, or I guess in the case of Civil, every purchaser had to ask themselves, and it sounds like the answer was, I don’t think the timing and the project isn’t for me.
Laura Shin:
Yeah. Yeah. I think timing is a huge part of it, and then obviously the barriers they put up didn’t help, but in a way I don’t think that this is like a verdict on that model itself because I actually do think that requiring a bit of knowledge about what you’re purchasing before you purchase it is not a bad idea at all, and also, you know, in theory when ICOs were first proposed and what everybody was super excited about, at that time they were like, oh, this is how you can seed activity in the network. So you know, if you just have all these speculators on your network then you’re not going to get activity on the network. So I don’t think that this necessarily says the Token Foundry model will never work.
But one other kind of I guess evolution of the ICO that we’re seeing, you know, not only this direction that Token Foundry has gone where they’re trying to push it more as a product, but the other evolution is airdrops which I know both of you have different takes on. So Marco, Blockchain recently announced an airdrops program. Why don’t you describe it and how it works?
Marco Santori:
Yeah, we just published our guiding principles on blockchain airdrops. A blockchain airdrop is a pretty straightforward mechanic. When token creators create a network, create a new token, and they want to actually seed the network, drive decentralization, achieve network effects, and actually get people to use the thing there’s probably a better way than selling it to a bunch of whales at a deep discount who don’t really care about the token and they just see the thing as a ticker symbol. There’s probably a better way.
We think that better way is airdropping those tokens, delivering them for free directly to the private keys of 30 million wallets all around the world who not only will have those tokens but they’ll have direct control over those tokens on the network with their private keys so that they can actually use them.
That’s what blockchain has always been focused on, the actual functional use of these tokens, and it should come as no surprise that it was an attractive proposition to me when I was looking for the next thing after advising projects. I thought, what project is really in line with my beliefs in this space and where the real value is? I never really saw these things as ticker symbols, as just assets to trade. I saw them as more than just investments, I saw them as functional items, things that people could use to make their lives better.
And as we said in our white paper announcement we’re still going to be doing our very first airdrop, and more news of that will come shortly, but the idea is that we want to make blockchain a place where people sign up and regularly they’ll find new assets for free in their wallet to actually use, to experiment with, to try, to test, to pay their friends, to create assets, to do all of the things that make a blockchain special, and they can do it without having to buy those things in an ICO, without having to mine them, without having to set up a payment processer so that they can get them in exchange for their goods and services. Just a simple, easy way to try cool, new crypto, and that’s the Blockchain airdrops program.
Laura Shin:
And Andy, how did you guys handle the Dfinity airdrop?
Andy Bromberg:
Yeah, so actually I want to go back for a sec to what Marco was just talking about. You led into this with I think the fair assertion that there may be some things that Marco and I disagree with on the approach to airdrops, but we are incredibly aligned on basically everything he just said.
A couple of things to note there. One, for those that are less familiar, airdrops are amazing because just like Marco was saying they’re a way to bootstrap adoption and interest in a network, and analogy I use a lot is that I think of PayPal as kind of the original, albeit non-blockchain, airdrop, where when you signed up for PayPal in the early days you got ten bucks, twenty bucks of PayPal credit, and they just dropped it right into your account, and what happened was you would go and use it on the PayPal network to pay a friend or pay a merchant and then you’d get addicted. You’d say wow, this is a really great service, and you’d start to put your own resources into that PayPal network and begin to use the PayPal network more effectively.
Now that was pre-tokens, but airdrops in the blockchain world are exactly that concept, that we’re going to give you a little bit of this token. Start to use it, get some real utility out of this network, and you’ll realize that you should actually be a more active user of this network and maybe put your own resources towards the cause, and we think that’s an incredibly compelling piece of it.
And this speaks to what we were talking about earlier, about the evolution of the market where I think last year, just like Marco said, the idea was we are going to run an ICO and that ICO will serve as both a method of accumulating capital, forming capital for the business, building it and distributing to an early set of users, but then in some cases what we found as the industry has matured is that it makes sense to separate those two activities, and it makes sense to run maybe a private sale to a smaller set of sophisticated people investing for purely financial upside to raise capital, and then separately do something like an airdrop where you can go and reach a larger set of users that actually want to use it and are maybe not motivated financially but rather motivated by the uses.
Those are two different audiences and conflating them in one issuance is not necessarily the right way to go. For some issuers it may still be, but for many others moving into this private sale and airdrop model I think makes a lot of sense. That’s why I think Blockchain and CoinList are both really interested in this concept, because it’s a means of getting tokens to users that will actually use them on a network and actually use these networks the way they’re intended to be used.
Laura Shin:
And how do you figure out which wallets to target?
Andy Bromberg:
That’s a really good question. I think that is both an art and a science and it’s in its very early days. I broadly see three types of airdrops with regard to targeting. The first is a really broad airdrop, so this is one you might say we’re going to airdrop to everyone that has a blockchain wallet or everyone that has Ethereum on the network or something like that, and this is really an awareness mission which is a great mission. Hey, we’re going to reach as many people as we can, and get awareness out there, build the brand, get some interest, convert some of these people into users, and then develop from there. So that’s one approach.
The second is airdropping based on off-chain activity, so something like someone who signed up for a mailing list or engaged with a product before, or you know, fits a certain criteria, so maybe they’re a data scientist, you want to airdrop to data scientists, or they’re a Wikipedia editor and you want to airdrop to Wikipedia editors, and that’s something that we’re working really hard on, is how to do that targeting effectively for these issuers, and that’s what we did with Dfinity.
So Dfinity airdropped about 35 million dollars’ worth of tokens to tens of thousands of people that were already in their network and in the CoinList networks. These people had the off-chain characteristic of being a Dfinity or a CoinList community member and they could go and sign up because they had been supporters of the project or supporters of the network prior. So that’s a second type of airdrop, is based on something true about someone in the real world.
And then the last category is based on on-chain activity, so you could airdrop to someone based on their using a token. So imagine a world where a network airdrops tokens to a bunch of users and then re-airdrops more tokens to the users that are using that token actively on that network, so rewarding your good users and saying, thanks for using the airdrop tokens, in PayPal terms, thanks for using your ten dollars, here’s three more, keep going, keep spending, and that’s a really interesting concept. There’s a bunch of other varieties of on-chain airdrops that you could do too, but that’s broadly kind of the three categories that we see there.
Laura Shin:
Interesting, and just to be clear, I think Dfinity has sort of avoided US residents in some fashion. How did they do that?
Andy Bromberg:
Right, so not wanting to speak for Dfinity’s legal counsel here, but this gets into I think maybe one area of difference between Blockchain and CoinList, we generally have the perspective that at least in the US while the questions around how to define these tokens from a regulatory perspective are still up in the air it’s important to treat airdrops as offerings of securities. So we can dig into why we think that’s the case, but our view is that if you want to give away these tokens at this point in at least the regulatory environment you’ve got to treat it like a securities offering, and we’ve come up with a way to airdrop tokens to users, US and international, who are unaccredited or accredited, anyone can get them, and that’s part of the CoinList airdrop’s product that we’ve started offering now.
Dfinity’s view was that by avoiding the US and also by being a non-US company themselves they didn’t have to deal with this issue, and so they opted to airdrop to non-US participants for regulatory reasons, but that’s kind of separate from the product that CoinList has since developed and launched that enables giving away tokens that may have a questionable regulatory classification to anybody, again, US or international, accredited or non-accredited, with the product that we’ve built there, and we think that it’s really important to treat these things conservatively and our view is that you’ve got to treat these things like securities offerings at this time.
Laura Shin:
And Marco, I was reading your white paper, yeah, you guys were saying that maybe they’re not necessarily securities offerings.
Marco Santori:
Well, it’s a fact and circumstances test as we’ve said a couple of times. So the swift and obvious answer is, well, it depends on what you’re airdropping, right? If you’re giving something away for free, well, that can’t be a securities offering. But the law has said, very rare you’re ever really doing anything for free, are you? You’re always trying to do something for yourself.
So there’s a whole line of stock giveaway cases where companies have given away their stock for free and taken the position that this can’t possibly be a securities offering, where are any of the investor-based risks if the investor hasn’t given us any money? Well, the thing is stock is an enumerated security in the Securities Act. If you’re giving it away and you’re getting something in return, whether it’s good will, more users, increased metrics, basically anything, even if the user isn’t directly paying you, well, that passes the standard. The standard for a securities offering is whether it was “for value.” It’s a very low standard. Of course you got some value out of it even if it’s self-aggrandizement. There is some value that you got from it.
So the actual offering of a security via an airdrop, well that would just be a securities offering. It’s hard to imagine how you could avoid that. But if the thing you’re giving away is not a security then, well, it can’t be a securities offering. And that’s not a controversial position, this is sort of black letter law, and remember, in order for a token, at least most of these utility tokens to be considered securities they have to be some investment of money. There has to be some payment to the involved in the transaction or scheme or at least what’s called capital put at risk for the legal _____ 0:53:51 out there, it’s not the risk capital test, it’s something else. The case law is pretty uniform that the person getting the thing in order for the thing to be an investment contract and therefore a security has to pay something, they have to put their capital at risk, and in an airdrop that doesn’t happen.
Laura Shin:
But Marco, I looked up those cases about the free stock and I saw this quote from the person who was the SEC enforcement director at that time, and he said, “Free stock is really a misnomer in these cases. While cash did not change hands the companies that issued the stock received valuable benefits.” So the way he’s arguing it is not what did the “investor” receive, but he’s saying that the companies that issued it received something valuable, and that’s…
Andy Bromberg:
So can I chime in here?
Marco Santori:
Yeah. Absolutely.
Andy Bromberg:
Because I think this is actually an important point of clarification. I think a lot of people have made…I’m with Marco on one step of this argument, just not the second one. There’s a two-step argument here that we take as to why these are offerings of securities. The first is, is it an investment contract that is being played with in this airdrop? If so, ipso facto it’s a security, investment contracts are by definition securities.
But the second piece of the argument is, if it is a security can you give it away? And I absolutely agree with Marco, that if it is a security, if it’s an investment contract which means it’s a security, then there’s a question of whether or not you can give it away, but what Marco is arguing, I think Marco, and correct me if I’m wrong, is that this cannot be an investment contract in the first place because there’s no investment of money. Is that right?
Marco Santori:
So that’s the right framework and it depends on the token. So if in fact the underlying asset that you’re giving away is not a security then it doesn’t matter if the person giving it away got any value for it. There has to have been an investment of money. If the underlying asset is an investment contract then the for value test, that very low bar, does apply and it’s probably a securities offering.
Andy Bromberg:
So that’s where we disagree I think.
Marco Santori:
So that’s absolutely right, it depends on what the underlying asset is.
Laura Shin:
Okay. So in the case of this quote the reason why this doesn’t apply in the case of tokens is because he was talking about stocks which are obviously an investment contract, but there are some tokens that would not be considered an investment contract. Is that where the distinction is?
Marco Santori:
Yeah. There you go. So that’s right on. Now if you look out there and if you listen to what the chairman said, well, pretty much all these things are investment contracts. So if you were to airdrop pretty much any of them then you’re giving away a security under that framework, and that’s a securities offering. We don’t think that applies to all of them.
Andy Bromberg:
So our view there, and this is I think where we take a slightly different view, is even if there is no investment of money we still believe these tokens that are being airdropped can represent investment contracts.
And the investment of money piece comes from the popularly talked about Howey Test which is the definition of an investment contract. People often talk about it having three prongs. There’s an expectation of profits, that the investment of money is in a common enterprise, and that any profit comes from the efforts of a promoter or third party. But there’s actually a fourth prong to the Howey Test which is the one that Marco is talking about, which is that it has an investment of money, there’s an investment of money for this asset, and if you satisfy all four of those then it’s an investment contract.
So what it sounds like, and Marco, please correct me if I’m wrong here, what it sounds like the reliance on there is that there’s no investment of money so it’s not an investment contract, but what we look to is, it’s actually in the DAO report, I think, the kind of infamous DAO explosion a year or so ago, where they say in determining whether or not there’s an investment contract the investment of money doesn’t need to take the form of cash, and I think it cites, I want to say it’s like a motor freight case or something, where they say that, you know, regardless of Howey referencing an investment of money investment can take the form of goods and services, and that even if there’s no capital changing hands, if these people are creating, and this is our interpretation, if these people are helping to create a public market by engaging with the network that in fact satisfies the investment of money prong of the Howey Test in that these tokens will still be considered investment contracts and thus securities and thus not able to be given away, again, even if there’s no investment of money from the beginning there.
Marco Santori:
I am super impressed by that. I am super impressed that you guys are diving that deep. We actually read that case and a number of other cases that are in that line of cases and every single one of them uniformly has said that there has to be some capital put at risk. It doesn’t have to be a payment of money, there has to be some capital put at risk, and that’s important, right? It’s not just a legal loophole, it speaks to the kinds of risks that are inherent in these transactions. After all, what are we trying to protect here? We’re trying to protect against investment risks.
If you haven’t put any capital at risk, well, that’s a different kind of risk, isn’t it? It’s not an investment risk, it’s something else, and maybe this goes back to my point about the FTC being the right regulator for a lot of these transactions, but if you read the motor freight case, its progeny, and those cases that came before, its precedent, the outcomes are actually all uniform on that front.
Laura Shin:
So we’re running out of time but I actually just want to ask you guys two quick last questions. So one thing that I was curious is, how do you guys handle KYC with an airdrop?
Andy Bromberg:
Yeah. So with CoinList, to answer that question directly, it’s a pretty standard KYC for us. You know, I will say that a really interesting dynamic with airdrops is that the value proposition of airdrops to users is free money, and that is awesome because it attracts all sorts of users to the network, which is a really appealing thing for these networks and enables them to grow quickly.
Free money also attracts scammers and fraudsters in great numbers because all sorts of people are interested in accumulating as much free money as they can. So our KYC is actually often amped up on this. We do things like selfie verification, making sure that a live photo of the person matches whatever identification document they’re showing, but we put these users through very similar KYC processes to the ones that we do for our normal offerings on the platform, but even a level stepped up there because there’s a higher incidence of fraud when people are getting to free money as opposed to investing thousands of dollars for access to these tokens.
Laura Shin:
And Marco, how do you guys do that with Blockchain because you don’t have people’s identities?
Marco Santori:
We do, actually. So when we launched Lockbox and Swap which is probably not as much fun as Netflix and chill, but close if you’re a crypto person. We launched Lockbox and Swap recently which is our hardware product. It’s Ledger Nano S, we partnered with Ledger, it’s a best in class hardware wallet to pair it to our best in class software wallet where you can actually store your crypto in a Ledger with tight hardware integration, tight software integration, with custom firmware on the device and customer software on the web.
But together with that we launched Swap, Blockchain Swap, so you can move between cryptos easily, quickly, low prices, fast, it’s great. It’s super convenient but look, we’ve also just taken the position that that’s probably money transmission, it’s probably…well, we know that FinCEN here in the United States, the federal regulator thinks it’s money transmission. We actually do ask people to become Blockchain verified if they want to engage in regulated activity on the network.
So now it’ll always be free and easy and frictionless to interact directly with your crypto in the software wallet and even use the hardware wallet, Lockbox, without having to undergo customer identification because you’re not our customer, it’s a non-custodial wallet, but if you want to start engaging in higher risk activity like exchange then you bet you, we do KYC people.
It’s not required in an airdrop to KYC people under the law but we have to make sure that people are not, well, they’re not Sybiling us, right? There’s no Sybil attack going on. There’s not one person opening up thousands of wallets to try to get more crypto than they’re entitled to in an airdrop. So like Andy mentioned, fraud is important, it’s something we’re concerned with and we want to make sure that when it comes to an airdrop there’s not one person pretending to be a thousand so that they can get more tokens or more crypto than they’re due.
Laura Shin:
Well, it sounds like for this question that I asked at the beginning, what is the state of ICOs, it sounds to me like the answer is that there’s a lot of self-regulation coming into this space to…because I mean…yeah, it’s just a lot of professionalization and it’s sort of companies that are trying to act in compliant fashion. So I guess that’s the state we’re in in 2018.
I think we’re pretty much out of time. We’ve gone quite a bit over. Where can people learn more about you guys and also your companies?
Andy Bromberg:
Yeah, I’m Andy Bromberg. You can find us at coinlist.co or twitter.com/coinlist, and always happy to talk more about all of these things, token sale dynamics, airdrops, regulatory matters, and anything else.
Marco Santori:
Yeah, and I’m Marco Santori, I’m at Blockchain. It’s pretty easy, blockchain.com. You can open up a free wallet right there on the homepage.
Laura Shin:
Great. Well, thank you both for coming on Unchained.
Andy Bromberg:
Thanks for having us.
Marco Santori:
Thanks for having us.
Laura Shin:
Thanks so much for joining us today. To learn more about Marco and Andy check out the show notes inside your podcast player. New episodes of Unchained come out every Tuesday. If you haven’t already, rate, review, and subscribe on Apple podcasts. If you like this episode share it with your friends on Facebook, Twitter, or LinkedIn, and if you’re not yet subscribed to my other podcast, Unconfirmed, I highly recommend you check it out and subscribe now. Unchained is produced by me, Laura Shin, with help from Raelene Gullapalli, Fractal Recording, Jennie Josephson, and Daniel Nuss. Thanks for listening.
