Digital Tokens: Rethinking the term “Cryptocurrency”

Guest post by Daniel DeWolf, Rachel Gholston, and Marine Bouaziz of Mintz Edge

What are the similarities between a one dollar bill, a share of a company, and a pre-paid gift card? The answer is……..not so much! The same is true of the similarities between virtual currencies, security tokens, and utility tokens; in truth, not so much. Yet, if you follow the world of digital tokens in the media and popular press, you would think that virtual currencies, security tokens, and utility tokens are all very similar because they are often concurrently and interchangeably discussed under the topic of “cryptocurrency.”  On the news, in numerous blog articles, and even in investment prospectuses, “cryptocurrency” is used to describe virtual currencies, security tokens, and utility tokens even though they are very different concepts, each of which is subject to different legal frameworks and regulations. While each of these items are created on distributed ledgers using blockchain software, from both a legal and a functional perspective, the similarity ends there. We should re-think the use of the word “cryptocurrency,” and instead use the terms that are specific to the categories that have developed: virtual currencies, security tokens, and utility tokens.  In our descriptions below we provide further information on the meanings of each of these categories.

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Is Delaware Really a ‘Sandbagging State’?

Guest post by Daniel E. Wolf, Partner, Kirkland & Ellis LLP

In the private M&A context, “sandbagging” refers to a buyer, who despite having knowledge of a breach of representation or warranty by a seller at some time before closing, proceeds with the closing and then seeks indemnification from the seller for the breach of representation or warranty of which it had prior knowledge.

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