COSS official announcement regarding payouts is out

Pretty much the same what Rune were saying during the last couple of hours, supported by attached legal opinion.

Also, what Rune was saying recently.

Also, full content of the said legal opinion:

Issues to be addressed:
1. Whether the proposed ICO to be carried out by COSS infringes the Securities and Futures Act (“SFA”)
2. Whether the contents of the white paper regarding the proposed ICO exposes COSS to legal liability
3. To vet the Terms of Use and whether operating the COSS platform infringes any of the applicable laws in Singapore

Brief Facts:
COSS Pte Ltd intends to list an ICO to exchange COSS Tokens for Ethereum in order to develop their platform as indicated in their white paper.
The COSS Tokens Allocation Plan is as follows:
25,000,000 COSS Tokens – Pre-ICO / Fire Swap (25% Bonus – 50 ETH minimum buy-in)
130,000,000 COSS Tokens – ICO – COSS Tokens Swap
30,000,000 COSS Tokens – Developers, Stakeholders, Staff, Operations, Strategic Partnerships
10,000,000 COSS Tokens – CAP (COSS Affiliate Program)
5,000,000 COSS Token – Advisory Board
ICO-Fund Distribution Plan
50% - IT Development, User Experience, Roadmap Completion
25% - Mergers and Acquisitions
10% - Marketing Plan
10% - Operations
5% - Shareholders, Board of Directors, Advisers

(1/4)

Legal opinion
1. Whether the proposed ICO to be carried out by COSS infringes the Securities and Futures Act (“SFA”)
In Singapore, “securities” is defined under section 2 of the SFA as:
(a) debentures or stocks issued or proposed to be issued by a government;
(b) debentures, stocks or shares issued or proposed to be issued by a corporation or body unincorporate;
(c) any right, option or derivative in respect of any such debentures, stocks or shares;
(d) any right under a contract for differences or under any other contract the purpose or pretended purpose of which is to secure a profit or avoid a loss by reference to fluctuations in —
(i) the value or price of any such debentures, stocks or shares;
(ii) the value or price of any group of any such debentures, stocks or shares; or
(iii) an index of any such debentures, stocks or shares;
(e) any unit in a collective investment scheme;
(f) any unit in a business trust;
(g) any derivative of a unit in a business trust; or
(h) such other product or class of products as the Authority may prescribe.*
(Emphasis Ours)
*As of today, the Authority has not prescribed cryptocurrencies as securities.

It is unlikely that COSS Tokens would be considered shares or debentures. Under subsection (e), a collective investment scheme (“CIS”) is defined under the SFA as:
(a) an arrangement in respect of any property —
(i) under which —
(A) the participants do not have day-to-day control over the management of the property, whether or not they have the right to be consulted or to give directions in respect of such management; and

(2/5) - kek

(B) the property is managed as a whole by or on behalf of a manager;
(ii) under which the contributions of the participants and the profits or income from which payments are to be made to them are pooled; and
(iii) the purpose or effect, or purported purpose or effect, of which is to enable the participants (whether by acquiring any right, interest, title or benefit in the property or any part of the property or otherwise) —
(A) to participate in or receive profits, income, or other payments or returns arising from the acquisition, holding, management or disposal of, the exercise of, the redemption of, or the expiry of, any right, interest, title or benefit in the property or any part of the property; or
(B) to receive sums paid out of such profits, income, or other payments or returns.
(Emphasis ours)

The requirement under subsection (a)(i)(A) is not fulfilled for the purposes of classifying an ICO as a CIS. This is because in an ICO, the Users are considered active participants. They are required to create an account with COSS before participating in the ICO. They have full ownership and control of the Tokens in which they trade and they can choose to sell or use the Tokens on the COSS platform at any time. It can be argued that the User is more similar to a purchaser who is buying a good of utility (i.e. Tokens) than an investor.

The requirement under subsection (a)(i)(B) is not fulfilled as once again, the Users retain management of the COSS Tokens after a Token Swap. COSS and its entities do not retain any control of the User’s Tokens during or after the ICO.

The requirement under subsection (a)(ii) is not fulfilled as although contributions are made by the participants in the form of ETH, the returns under the Bonus Scheme made to them are not pooled. Instead, the returns are paid into the wallets of each individual participant. Since subsection (a)(ii) is conjunctive with the use of the word “and”, it is not fulfilled.

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Due to the use of the word “and” between subsections (a)(i)(A) and (a)(i)(B), as well as subsections (a)(ii) and (a)(iii), we can see that the requirements under a CIS are conjunctive. Since subsections (a)(i)(A), (a)(i)(B) and (a)(ii) are not satisfied, it is unlikely that an ICO will fall under the definition of a CIS.

2. Whether the contents of the white paper and the Token Swap Agreement (“TSA”)* regarding the proposed ICO exposes COSS to legal liability
*The Token Swap Agreement is the new name for the Contribution Agreement.
The current “Roadmap & Development” in the white paper is divided into three phases. It is stated in Phase 1 that COSS is live and lists the current services and functions available on the COSS platform. The proposed ICO falls under Phase 2 which states the new features which are to be implemented with the funds raised from the ICO. Phase 3 states the future plans and developments in the next two to three years after the ICO. At the beginning of the white paper, a section titled “DISCLAIMER” has been inserted to show that the white paper is a brochure and is not legally binding. The only binding agreement is the TSA. The “Roadmap & Development” and “COSS Token Swap (ICO)” sections have also been amended slightly.

In the TSA, section 7 titled “Disclaimers” has been added (after modification from TenX Terms and Conditions). This section explicitly disclaims any liability of COSS in the numerous circumstances which may follow from the conduct of the ICO. Section 17 titled “Gradual Release of Tokens Schedule” has been incorporated into the TSA to reflect the escrow agreement on 23 June 2017. The word “Contribution” has also been removed to avoid confusion with a security investment. There are various other amendments and addition of standard clauses in the TSA.

(4/5)

3. To vet the Terms of Use and whether operating the COSS platform infringes any of the applicable laws in Singapore
Comparing COSS’s Terms of Use with that of TenX, it appears that COSS’s Terms of Use has not incorporated COSS’s KYC/AML policies. Therefore, I have added COSS’s KYC/AML policies (adopted from the white paper) into COSS’s Terms of Use. This is to show that COSS does adhere to the strict AML/CFT* requirements set out by the MAS. This avoids any potential infringement of the applicable regulatory laws of Singapore.
*Countering the Financing of Terrorism

Conclusion
In conclusion, it is unlikely that COSS Tokens can be considered securities or that an ICO can be considered a CIS for the purposes of the SFA. The white paper and TSA have been amended accordingly to ensure that any information, terms and/or representations are stated clearly and without contradictions or inconsistencies. Disclaimers are also added to the white paper and TSA to protect COSS from any liability arising from the ICO. Amendments in the white paper and TSA are done in red.

(5/5)

I'd post the thing in original DOCX format but no one would click it, kek

I'm new to this coin, help me out here please; it says max supply om cmc 200m, but this ico has that amount to distribute? Plus the 80m already in existence?

When is ico? Do you need to sign uo for it ahead of time?

...

okay so homopill me, does this mean I should buy or sell?