By Josiah Wilmoth
Blockchain technology is set to finally realize its Kodak moment because the photography pioneer has renewed its plan to create its own cryptocurrency.
Remember the Kodak TGE? It’s Finally Moving Forward
It feels like a lifetime ago that Kodak announced it would hold a token generation event (TGE) to create KodakCoin, a cryptocurrency designed to help photographers protect the rights to their digital images. Well, strictly speaking, the token is being developed by a company called WENN Digital in a licensing partnership, but it will bear the storied Kodak brand nonetheless.
The token sale was scheduled to begin on Jan. 31, but Kodak and WENN abruptly delayed the TGE on the eve of its launch — a move that correlated with a precipitous cryptocurrency market correction. Little was heard about the TGE in February, leading many to question whether it would ever happen at all.
On Wednesday, however, the two companies began distributing a “light paper” for KodakCoin — which will run on the ethereum blockchain — and its TGE to prospective token buyers.
Kodak Doesn’t Know If Its Token Is a Security
As whitepapers go, it’s a fairly standard document. Notably, though, the light paper leaves one important question unanswered: whether KodakCoin is a utility token or a security token.
“While WENN Digital intends for the KODAKCoin issuable under the SAFTs to be classified as utility tokens rather than securities tokens, WENN Digital will be required to make a final determination of the tokens’ status as one or the other prior to the time that the KODAKCoin are issued,” the firm said. “In conjunction therewith, WENN Digital may decide to seek formal or informal input from the staff of the US Securities and Exchange Commission.”
That statement is, to put it gently, less than illuminating, particularly given recent warnings issued by the SEC about its application of securities laws to TGE tokens.
As Strategic Coin reported, SEC Chairman Jay Clayton has said on multiple occasions that “most” or “many” TGEs that he has observed constitute unregistered securities offerings. For that reason, the agency issued subpoenas to “dozens” of TGE operators it believes may have violated SEC regulations.
Earlier this week, the SEC further warned cryptocurrency exchanges against listing security tokens — particularly unregistered securities — without registering their trading platforms with the agency.
At least one TGE has responded to this climate by registering its sale as a securities offering, and it is likely that more will follow suit in the future.
Strategic Coin is a leading research and advisory firm for companies planning to integrate blockchain capabilities into their business model via utility token launches. Our customer research reports provide qualitative and quantitative analysis of token use cases and platform value. With the Strategic Coin Advantage network of partners, we offer customized services for the pre-launch, full-launch, and post-launch phases of Token Generation Events (TGEs).
Featured Image from Paul Sakuma / AP