NORTH AMERICAN BITCOIN CONFERENCE A GREAT SUCCESS

Mr. Belenky would like to extend a heartfelt “thank you” to all who came out to Miami this week to participate in the forum for knowledge and the burgeoning token market place, which will hopefully continue to grow at and evolve at a breathtaking pace. Representing BLOCKWEATHER HOLDINGS LLC., as well as meeting innovators and free-thinkers was a tremendous honor. The future looks bright for those who take the reigns of their destiny. Wishing the best to all!  

NORTH AMERICAN BITCOIN CONFERENCE IN MIAMI

Please join Mr. Belenky on January 18-19 at the North American Bitcoin Conference in Miami at the James L. Knight Centre. Mr. Belenky will be available to speak with cryptocurrency investors, enthusiasts, and innovators on behalf of Blockweather Holdings LLC, the premier managed account hedge fund in the industry. Please email us ahead of time if you would like to meet at the conference to discuss related matters.

DOMESTIC ASSET PROTECTION TRUSTS

In our ongoing series debunking of legal business practices we continue with Domestic Asset Protection Trusts (DAPTs). These are simply statutory trusts, created by the laws of currently 16 states, which allow the creator of the trust or ‘grantor/trustor’ to create an irrevocable trust for his/her own benefit (self-settled) while presumably protecting the trust assets from creditors. These trusts developed in competition with the popular offshore trusts, as the states saw a business opportunity and attorneys wanted a more expedient alternative to going offshore. A DAPT must have a trustee…

BASIC ASSET PROTECTION

Generally speaking most states protect the necessities of life, or at least some amount thereof, from seizure by creditors, which may include items such as the homestead, salary/wages, retirement benefits/accounts, health insurance account, personal property (vehicle, furniture, etc.), and other items depending on your particular state. No state protects any of a person’s property from a divorce decree division and anything one owns may be divided, sold off, or given to the other spouse depending on the circumstances. Similarly with regard to child support: this debt will not go away…

DO YOU REALLY NEED A FAMILY LIMITED PARTNERSHIP?

Attorneys love to push Family Limited Partnerships for estate planning and asset protection purposes, generally because they are costly to prepare and involve a great deal of paperwork, but the real reason is that most people simply do not understand that like most any other profession these entities are just another way to generate business for the law firm and simpler methods exist to provide equal protection without the potentially negative ramifications and governance responsibilities. Family Limited Partnerships (FLPs) are simply statutory Limited Partnerships, like corporations or LLCs, created by…

DO YOU REALLY NEED A LAND TRUST?

First, what does a land trust do? It allows the recording of land title anonymously using a 3rd party trustee, thereby providing some protection from being discovered as the true owner of the land. However it should be noted a 3rd party paid trustee must disclose the identity of the trustor/settlor and beneficiaries under a court order which generally happens when litigation against the property held in trust is commenced and the discovery phase begins. The heretofore private trust agreement will need to be turned over under a discovery request…

WORST STATES TO FORM AN LLC

We recently reviewed the best states to form an LLC, which include Delaware, Wyoming, and New Mexico. In this post we will review the worst states due to cost, duration, burdensome filing requirements, taxes which must be paid, lack of asset protection/anonymity features, and the regulatory climate. Two of the three worst states would be easy to guess and most people would agree with those states being on this list, the third may be slightly controversial. But that’s alright, the blog is simply an opinion, and anyone is free to…

CRYPTOCURRENCY TOKEN ANALYSIS USING THE HOWEY TEST

Section 2(a)(1) of the Securities Act of 1933 defines “securities” as: “any note, stock, treasury stock, security future, security-based swap, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement… investment contract… or, in general, any interest or instrument commonly known as a ‘security’, or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing.” The seminal Supreme Court case for determining whether an instrument meets the…

TOP THREE BEST STATES FOR LEGAL ENTITY FORMATION

This is the eternal and perpetual question just about every client starting a company wants answered, and perhaps some insight may be provided here. Nothing here may be deemed indisputable fact, merely the opinions of a legal professional, and other experts may differ, as in any other field. Generally most legal service providers will want to form as many entities as possibly so as to increase fees without regard for what is in the best interests of the client. The general guise of this course of action is generally “asset…

HOW TO REVIEW A PRIVATE PLACEMENT MEMORANDUM

The Private Placement Memorandum is a complex legal disclosure document which relies on The Securities Act of 1933 and Regulation D, adopted in 1982, to permit securities offerings to specific parties which are exempt from registration with the SEC. This rule was enacted to enable startups some leeway in raising funds from parties with whom they have had a preexisting relationship for at least 30 calendar days before an offer to buy such securities is made. Most capital raising activity is conducted under Rule 506b of Regulation D; however, a…

LEGALZOOM AND THE DO-IT-YOURSELF LEGAL SERVICES SCAM

In centuries past, the legal profession was highly selective about the individuals who were permitted to dispense legal advice. Attorneys were generally regarded as highly competent and generally ethical in providing legal services. This began to change a few decades ago when law schools began to proliferate as lawyer mills and with little interest other than making as much money as possible from naïve college grads who would happily take out hundreds of thousands of dollars worth of loans from the government and private agencies for the promise of a…

ESCROW AGREEMENTS

Escrow agreements are used to safeguard money or property with a neural third party while a transaction is completed. The escrow agent is the neutral party that will hold the property until a transaction is completed or fails and will act according to the terms set forth in the escrow agreement. To be more specific, the escrow agreement will detail the circumstances under which the agent will take and retain the property and whether anything will be done with it while it is stored. The agreement states how the property…

CONDITIONS, DECLARATIONS, AND DISCRETIONARY AUTHORITY

The final types of contract terms which make up most properly constructed agreements are conditions, discretionary authority, and declarations. We will begin with declarations because they are the simplest to understand. Simply put a declaration is a statement of fact as to which the parties agree. It is simple to understand because no rights or remedies are associated with declarations; their breach may not be give rise to a lawsuit. As an example, all definitions in a contract are declarations; they have no substantive effect on their own. No party…

RIGHTS AND COVENANTS IN CONTRACT DRAFTING

These contract drafting terms both essentially mean the same thing, albeit from differing viewpoints. A covenant is simply a promise or an obligation to do or not do something. A contract right is the obligation of the other party to do or not something for the party that holds the right. If there is a duty or obligation to perform then there must a correlative right to receive that performance. A covenant is drafted from the viewpoint of the actor, wherein a right is drafted from the viewpoint of the…

CRYPTOCURRENCIES TUMBLE AFTER COMMENTS BY CHASE CEO

Jamie Dimon, affectionately known as “JD” by friends and family, has come out bent-wrist swangin’ against Bitcoin specifically, calling it a “fraud” and stating any Chase traders he found to be involved in trading it would be fired for being “stupid”. “It’s worse than tulip bulbs. It won’t end well. Someone is going to get killed,” he quipped in the arrogant tone of a god who reigns on Mount Olympus above mortal man. Further he went on to say that Bitcoin is “not a real thing,” which comes as a…

BOILERPLATE GENERAL CONTRACT PROVISIONS

The “boilerplate” contract provisions typically form the last section of an agreement, and they are typically dismissed as “housekeeping” of secondary importance. These provisions address issues such as amendments, governing law, waiver of trial, alternative dispute resolution, succession/assignment, notices, counterparts, severability, authority and merger. Dismissing these provisions as irrelevant or unimportant is a serious mistake, and as much attention should be paid to each word of these provisions as to any other portion of the document. Ignoring these sections may result in dire repercussions for one or all parties, for…

CHINA HALTS INITIAL COIN OFFERINGS AND CLOSES BITCOIN EXCHANGES

During the first week of September, China issued its ban on new “Initial Coin Offerings” which raise funds for start-ups by receiving either bitcoin or the ether coin in exchange for a new currency with the idea that the value of the new coins will increase as the project grows and is implemented by a greater number of users. We can only surmise on the reasoning behind the ban, as the government is being notoriously quiet regarding this drastic action.We might guess that it was China’s concern for financial fraud…

PAROL EVIDENCE RULE AND THE MERGER CLAUSE

The parol evidence rule is a substantive rule of contracts which prohibits the introduction of contradictory extraneous prior or contemporaneous agreements to a written, signed document. This type of rule is essential to the certainty provided by signed contracts, and business could hardly continue to function if any party was free to claim additional terms and seek modification at any time after the contract is signed. This rule means that a party that signed that contract cannot later claim that there exist prior oral, written, electronic or any other type…

SURPLUS OR EXCESS FUNDS AFTER FORECLOSURE

The typical foreclosure will not result in an amount above and beyond that which is owed to the lender, and the defaulted borrower may be on the hook for the deficiency. New laws allow the deficiency of the borrowers to be limited to the difference between the amount of the sale and fair market value, not the amount of the loan. It is in deficiency situations that the recommendation is to negotiate a short sale with the lender, which will release the borrower from a deficiency. However, in some situations,…

CONFIDENTIALITY, NON-CIRCUMVENTION AND NON-DISCLOSURE AGREEMENTS

Before a party enters into negotiations or preliminary discussions regarding any potential business transaction, idea or product care must be taken by both sides so that the communications are covered by a thorough agreement which will permit the full disclosure of potentially unique, profitable or secret information without fear of the other side appropriating and using it for its own benefit. If no such agreement exists the potential for litigation rises significantly if in the future one of the parties publicly reveals some product or idea which bears a resemblance…