Marco Santori on Airdrops and the “Complete Picture” of SAFT Regulation


Ever since the U.S. Securities and Exchange Commission (SEC) issued a stern warning about initial coin offerings (ICOs) in February 2018, cryptocurrency projects have had to consider different options for distributing their tokens — and funding their development.

One alternative for dispersing a token is an airdrop, where tokens are given out (for free) to the holders of an existing cryptocurrency. A former partner at law firm Cooley LLP has a positive view on them. “Airdrops can do no harm. In fact, we think they can make things better,” Marco Santori, who is now the president and chief legal officer at Blockchain, a bitcoin wallet provider, told Bitcoin Magazine.   

“An airdrop doesn’t get around the securities laws; but, that said, unless the thing that you’re airdropping, the token that you’re airdropping, is a security, then the airdrop is not a securities offering,” he continued. “I think they can be a powerful tool for decentralization.”

In a recent interview, Santori shared more of his thoughts on raising funds and the future of regulation.

He think an issuance framework he worked on while at Cooley called SAFT, short for Simple Agreement Future Tokens, is a useful alternative to traditional ICOs. In the arrangement, accredited investors lend money to a project with the promise that tokens will become available after the network is up and running. The SAFT white paper was published in October 2017; since then, SAFT has become a market standard.

“I think that the SAFT framework is probably the best that we have today,” Santori said. “If you layer on top of that the additional clarity that the SEC has provided in the context of Bill Hinman’s speech or the so-called ‘Hinman test’ that incorporated the SAFT framework, then you’ve got a pretty complete picture.”

Santori is referring to statements made by the SEC’s director of the division


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