Flowdesk’s Post

Loved our discussion today at #Blockworks #DASLondon on how the industry can innovate further to enable scale and liquidity enabling the growth of institutional players in the digital asset space. #redecentralisation #crypto #digitalassets #cybersecurity

The most common model now for real estate tokenisation is to use a SPV (Special Purpose Vehicle) to "own" the property to be tokenised and then issue shares of that SPV, to signify legal ownership. But is this, really tokenisation? Let's ponder.

Interesting lawsuit between a hedge fund and its compliance advisors. - Chatham capital transferred bonds between portfolios after clearing the process with its compliance advisors, who are former SEC enforcers. - The SEC found the trades, investigated, found them mismarked, and fined the manager $19mm. The settlement did not include an admission of guilt. - The fund lost clients when the investigation became known, which would not be unusual. - The PM is now suing its compliance advisors for negligence, asking compensation for both the fines and the lost business opportunities. It is surely aggressive (and the PM is a 'street fighter') but the devil is in the details. - How mismarked were trades? The SEC discovered that the firm collected an additional $11m of performance fees due to those markings. The PM says that the trading strategy performed well. - Did the advisor validate the process AND the prices? They did not flag them as suspicious, says the claim. - What are the duties of the advisors, best efforts? The terms of the contract will be key. - The judge just partially rejected the motion to dismiss. The case is moving forward. Big firms, big people, big lawsuit, unusual topic. It will make some interesting jurisprudence. #Enforcement #Bonds #Crossing #Compliance #Advisors #SECEnforcement. Navesink International (https://lnkd.in/eq8vGgP) is the home of the best industry experts related to financial markets.

Here are the must-reads from today’s edition of Advisor Squawk (advisorsquawk.com). If you enjoy Advisor Squawk, please consider following our page on Linkedin, Speedier Wall Street Trades Are Putting Global Finance on Edge Private Equity is No Place for Your Nest Egg TD Sues 2 Advisors, Claims They Stole Clients After Move to RayJay New York AG Announced $2B Settlement with Crypto Lender Genesis Wells Fargo Accused of ‘Aiding and Abetting’ $300M Ponzi Scheme with More than 1000 Victims: Report A $10B Real-Estate Fund is Bleeding Cash and Running Out of Options 10 Factors to Determine if Your Potential Niche is Really Viable How Focusing on Taxes Delivers Superior Wealth Management Results Are Financial Advisors Overwhelmed by Marketing and Neglecting Business Development ‘The Most Important Factor’: How Gatekeepers Gauge on Asset Managers Culture … And 14 New Articles Covering Industry News, Practice Management and Compliance

Here are the must-reads from today’s edition of Advisor Squawk (advisorsquawk.com). If you enjoy Advisor Squawk, please consider following our page on Linkedin, Speedier Wall Street Trades Are Putting Global Finance on Edge Private Equity is No Place for Your Nest Egg TD Sues 2 Advisors, Claims They Stole Clients After Move to RayJay New York AG Announced $2B Settlement with Crypto Lender Genesis Wells Fargo Accused of ‘Aiding and Abetting’ $300M Ponzi Scheme with More than 1000 Victims: Report A $10B Real-Estate Fund is Bleeding Cash and Running Out of Options 10 Factors to Determine if Your Potential Niche is Really Viable How Focusing on Taxes Delivers Superior Wealth Management Results Are Financial Advisors Overwhelmed by Marketing and Neglecting Business Development ‘The Most Important Factor’: How Gatekeepers Gauge on Asset Managers Culture … And 14 New Articles Covering Industry News, Practice Management and Compliance

While negotiating an exit on a convertible debt instrument with a fund’s legal team, we were responded with a comment ‘’your document is very new and different’’ To which we replied, ‘’so is the industry and facts and circumstances of transactions ‘’ Exit on a #SAFE ( Simple Agreement for Future Equity ) through #tokens is a common practice however, putting the transaction in legal wrapper is tricky. It is important to keep an optional exit in the SAFE upon tokens given the industry has a parallel ecosystem of tokens for project apart from the product quotient. Investors are often bullish on tokens than on equity and thus, provides an easy exit and a win-win for the start up, founders and the investors. Just as Edward Lampert said 👇. Wise words. #investment #lessonsofaweb3lawyer #SAFE #SAFT #web3

In one swoop, BitGo gets the ability to serve multiple use-cases for private securities and alternative assets, and gets an additional trust company. Way to go Mike Belshe & Team.

🌟 𝐍𝐞𝐰 𝐏𝐨𝐝𝐜𝐚𝐬𝐭 𝐄𝐩𝐢𝐬𝐨𝐝𝐞 𝟑𝟔: 𝐕𝐞𝐧𝐭𝐮𝐫𝐞 𝐂𝐚𝐩𝐢𝐭𝐚𝐥 𝐀𝐝𝐯𝐢𝐬𝐞𝐫 𝐈𝐧𝐭𝐞𝐠𝐫𝐚𝐭𝐢𝐨𝐧 🌟 Balancing entertainment and useful legal information is extremely difficult, but Dave Rothschild nails it in the latest episode of Tokens of Wisdom. Episode Highlight: Adviser Integration Doctrine 𝐖𝐡𝐚𝐭'𝐬 𝐭𝐡𝐞 𝐫𝐞𝐚𝐥 𝐢𝐬𝐬𝐮𝐞? • Many fund managers believe creating separate entities for different funds (like a crypto arm alongside existing VC funds) keeps them compliant and under the SEC's $150M registration threshold. For example, having two $50M VC funds and a separate entity managing $50M in non-qualifying SPVs targeting secondaries may seem like a way to circumvent private fund adviser rules. However, the SEC's "integration" doctrine can treat these separate entities as a single business. 𝐖𝐡𝐚𝐭 𝐢𝐬 𝐭𝐡𝐞 "𝐈𝐧𝐭𝐞𝐠𝐫𝐚𝐭𝐢𝐨𝐧 𝐃𝐨𝐜𝐭𝐫𝐢𝐧𝐞"? VC fund advisers often think they can dodge the 20% non-VC asset rule by creating different entities that file separate Form ADVs. Yet, the SEC can deem these ostensibly separate entities as one business unit in most cases. The primary SEC question: —Q: Are the entities operationally independent of each other? 𝐅𝐨𝐮𝐫 𝐊𝐞𝐲 𝐅𝐚𝐜𝐭𝐨𝐫𝐬 𝐟𝐨𝐫 𝐃𝐞𝐭𝐞𝐫𝐦𝐢𝐧𝐢𝐧𝐠 𝐎𝐩𝐞𝐫𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐈𝐧𝐝𝐞𝐩𝐞𝐧𝐝𝐞𝐧𝐜𝐞: 1. Capital Structure: Whether entities are adequately capitalized such that they can operate independently of each other—looking for true operational Independence; are they commingling assets or failing to treat each as a separate business (does one support the other with management fees?). 2. Common Control and Ownership: Are the entities are under common control, share ownership, or are they subsidiaries of each other? 3. Personnel: Whether entities share employees, managers, directors, or other personnel, particularly those involved in investment decision-making. 4. Investment Decision-Making Functions and Operations: Whether entities independently make investment decisions, utilize their own resources and research, and maintain separate client communications. These factors are interconnected and there are no bright-line rules for determining operational independence. The analysis is highly fact-specific and requires bespoke consideration of each case. Having personally retained Dave for this exact legal analysis before, I would highly recommend him if you are up against this kind of legal issue. Link in comments. #venturecapital #funds #RIAs

Shoutout to Blockworks for spreading the word about our groundbreaking governance proposal for 1inch Network! 🚀 Legal and regulatory stability can meet decentralised ethos, and STORM Partners is here to prove it. Curious? Read the full article here: #STORMPartners #Web3 #1Inch

This is an indicative sign-post; after $120B has been invested in the web3 space over the past 5+ years in over 4,000 companies, we are entering the exit/consolidation phase, which is good and part of any market maturation. Watch this space, more to come