Crypto Tourism and Blockchain Cruises
Posted by Laura Anthony, Esq. on June 26, 2018
Crypto Tourism and Blockchain Cruises- Today is a special LawCast reporting on Crypto Tourism. Crypto-tourism is a new term that I first heard less than a month ago and which is now suddenly everywhere that includes news or information related to the crypto market place. Blockchain Cruises which was organized by Edinburgh, Scotland based crypto wallet provider CoinsBank has already completed two cruises including multiple crypto millionaires and a third is planned for September. The cruises included prominent speakers such as BTCC exchange founder Bobby Lee, token promoter John McAfee, and investor and bitcoin cash advocate Roger Ver.
Other geographic areas are using crypto as a way to advertise and invigorate tourism, including Puerto Rico that has the added benefit of offering U.S. federal tax exemptions for residents. Switzerland now has an area known as the Crypto Valley complete with guided tours. Likewise Israel’s Silicon Valley has become a crypto destination.
Moreover, many crypto based travel providers are popping up, from Cryptocribs which is similar to Airbnb to Innovation Experience which books crypto based trips to Israel.
Although there is a benefit in bringing the material world to the digital world of crypto, there is a concern that many of these trips and tours are just a way for token issuers to market their ICO. I’ve talked a lot in both blogs and LawCasts about disclosure requirements in securities offerings, including digital securities such as tokens and coins.
Where a crypto based trip includes ICO or company presentations, potential investors should exercise the same caution as they do when reviewing any other investment, including asking basic questions such as:
Who exactly am I contracting with?
Who is issuing and sponsoring the product, what are their backgrounds, and have they provided a full and complete description of the product? Do they have a clear written business plan that I understand?
Who is promoting or marketing the product, what are their backgrounds, and are they licensed to sell the product? Have they been paid to promote the product?
Where is the enterprise located?
Where is my money going and what will it be used for? Is my money going to be used to “cash out” others?
What specific rights come with my investment?
Are there financial statements? If so, are they audited, and by whom?
Is there trading data? If so, is there some way to verify it?
How, when, and at what cost can I sell my investment? For example, do I have a right to give the token or coin back to the company or to receive a refund? Can I resell the coin or token, and if so, are there any limitations on my ability to resell?
If a digital wallet is involved, what happens if I lose the key? Will I still have access to my investment?
If a blockchain is used, is the blockchain open and public? Has the code been published, and has there been an independent cybersecurity audit?
Has the offering been structured to comply with the securities laws and, if not, what implications will that have for the stability of the enterprise and the value of my investment?
What legal protections may or may not be available in the event of fraud, a hack, malware, or a downturn in business prospects? Who will be responsible for refunding my investment if something goes wrong?
If I do have legal rights, can I effectively enforce them and will there be adequate funds to compensate me if my rights are violated?