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11.01.22
Focus on Fintech - Wilson Sonsini Quarterly Fintech Update - Q3 2022
In the Q3 2022 edition of Focus on Fintech, our attorneys discuss various regulatory developments related to banking and payments programs, including an update on the anticipated launch of FedNow, regulatory concerns related to “buy now pay later” programs and banking-as-a-service in connection with bank-fintech partnerships, expanded access to the Federal Reserve Bank accounts and services, and the FDIC’s concerns with misleading statements. They also discuss FinCEN’s final regulations on beneficial ownership reporting requirements and their effects, as well as the increased regulatory scrutiny on blockchain and crypto assets by the CFTC, OFAC, the SEC, and the White House. The newsletter concludes with state-level updates in the digital asset space and an overview of new agency-level departments that have been created to address the unique challenges posed by digital assets.
Client Highlights
5.06.22
Wilson Sonsini Advises Untamed Planet on $24.3 Million Fundraise and Partnership with Animoca Brands for NFT Games
On May 5, 2022, Untamed Planet announced it has raised $24.3 million to make 3D immersive nature games that make use of metaverse concepts and non-fungible tokens (NFTs). Animoca Brands led the investment, and will support the development of the game Untamed Metaverse along with Animoca’s subsidiary Nway. Wilson Sonsini Goodrich & Rosati advised Untamed Planet on the transaction.
Untamed Planet is a 3D immersive experience in which players will be able to explore a digital twin of the world’s most amazing wild landscapes, participate in quests, collect NFT assets, and form communities passionate about protecting nature, all of which will directly benefit nature conservation efforts in the real world. Animoca Brands is an investor in metaverse and NFT games with more than 200 blockchain-related investments, including Axie Infinity, OpenSea, Dapper Labs (NBA Top Shot), and Yield Guild Games.
Untamed Planet is a 3D immersive experience in which players will be able to explore a digital twin of the world’s most amazing wild landscapes, participate in quests, collect NFT assets, and form communities passionate about protecting nature, all of which will directly benefit nature conservation efforts in the real world. Animoca Brands is an investor in metaverse and NFT games with more than 200 blockchain-related investments, including Axie Infinity, OpenSea, Dapper Labs (NBA Top Shot), and Yield Guild Games.
Client Highlights
3.05.21
Wilson Sonsini Advises NightDragon Acquisition Corp. on Initial Public Offering
On March 4, 2021, NightDragon Acquisition Corp. announced the closing of its initial public offering of 34,500,000 SCALE (Stakeholder-Centered Aligned Listed Equity) units, including 4,500,000 SCALE units pursuant to the full exercise of the underwriters’ over-allotment option. Each SCALE unit consists of one share of the company’s Class A common stock and one-fifth of one redeemable warrant. Each whole warrant entitles the holder thereof to purchase one share of Class A common stock at a price of $11.50 per share. The SCALE units were sold at an offering price of $10.00 per SCALE unit, generating gross proceeds of $345,000,000. The SCALE units began trading on Nasdaq on March 2, 2021, under the symbol “NDACU,” and when the securities comprising the SCALE units begin separate trading, the Class A common stock and warrants are expected to be listed on Nasdaq under the symbols “NDAC” and “NDACW,” respectively. Wilson Sonsini Goodrich & Rosati advised NightDragon Acquisition Corp. on the initial public offering.
NightDragon Acquisition Corp. was formed for the purpose of effecting a merger, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses. While it may pursue an acquisition opportunity in any business, industry, sector, or geographical location, the company intends to focus its search on the cybersecurity, safety, security, and privacy sector.
Morgan Stanley & Co. LLC acted as lead book-running manager and Drexel Hamilton acted as co-manager in the offering.
The Wilson Sonsini team that advised NightDragon Acquisition Corp. included the following:
Corporate
Jeff Saper
Robert Day
Bryan King
James Babikian
Jeff Buckelew
NightDragon Acquisition Corp. was formed for the purpose of effecting a merger, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses. While it may pursue an acquisition opportunity in any business, industry, sector, or geographical location, the company intends to focus its search on the cybersecurity, safety, security, and privacy sector.
Morgan Stanley & Co. LLC acted as lead book-running manager and Drexel Hamilton acted as co-manager in the offering.
The Wilson Sonsini team that advised NightDragon Acquisition Corp. included the following:
Corporate
Jeff Saper
Robert Day
Bryan King
James Babikian
Jeff Buckelew
Bylined Articles
2.14.20
Rethinking What It Means to Protect Investors in the Digital Asset Space
By Robert Rosenblum, Amy Caiazza, Taylor Evenson, and Katherine Mann1
White Papers/Briefs
10.01.19
Conducting a Token Offering Under Regulation A
This white paper discusses considerations related to conducting a token offering under Regulation A under the Securities Act of 1933. The benefit of this strategy is that it can allow broad distributions of freely tradable tokens to their intended users. In July of 2019, two companies—Blockstack PBC and YouNow, Inc.—successfully launched the first two token offerings under Regulation A, working in collaboration with Wilson Sonsini Goodrich & Rosati. In the paper, the authors describe why Regulation A is a good option for many token issuers, the qualification process, and how token issuers should prepare for that process.
Alerts
1.10.19
Wilson Sonsini Recap: 2018 Regulation of Digital Assets + 2019 Predictions
Happy New Year from all of us in the WSGR Blockchain and Cryptocurrency Practice Group! The industry learned a lot about the regulation of digital assets in 2018, and we published some of our observations about those developments throughout the year.
Client Advisories
10.11.18
Getting to a Fully Operational Token Platform
This article discusses recommended strategies for token issuers to finance and develop fully operational and legally compliant token platforms through financing efforts and token distribution plans that are structured early on to address a broad range of potential regulatory issues. We generally recommend a two-step capital raising and token issuance approach that initially involves private offerings to accredited investors of instruments providing the right to receive tokens in the future and then involves public registration or qualification of the tokens. The article also provides a high-level outline of important regulatory considerations that are frequently raised by token offerings and token-related platforms but that are often overlooked until well after a platform's initial design.
Bylined Articles
9.26.18
Regulation A+ Offerings for Tokens: What is the SEC Waiting For?
In a recent article, we discussed why the Securities and Exchange Commission and its staff continue to think most cryptocurrencies and other crypto assets are securities at the time they are offered. If a token issuer plans to publicly offer and sell tokens that are securities, the offer and sale of those tokens generally needs to be registered (such as on a Form S-1) or qualified under Regulation A+.
Client Advisories
8.28.18
Regulation A+ Offerings for Tokens: What is the SEC Waiting For?
In a recent article, we discussed why the Securities and Exchange Commission (“SEC”) and its staff (the “Staff”) continue to think most cryptocurrencies and other crypto assets (“tokens”) are securities at the time they are offered. If a token issuer plans to publicly offer and sell tokens that are securities, the offer and sale of those tokens generally needs to be registered (such as on a Form S-1) or qualified under Regulation A+. For many token issuers, a Regulation A+ offering may be the preferable choice; among other reasons, a token offering under Regulation A+ does not need to be separately approved by state securities commissions, while a registered token offering may require state-by-state approval in addition to approval from the SEC.
Client Advisories
8.01.18
Why the SEC Thinks Most Tokens Are Securities And When the SEC Thinks a Token Might Stop Being a Security
A common misconception in the cryptocurrency community has been the belief that because a digital cryptocurrency or other crypto asset (token) is intended to have utility in the future, it is not a security at the time it is issued. That belief reflected a basic misunderstanding of the "Howey test," which is the principal test for analyzing whether most tokens are securities.2 The Howey test looks to the current status of an instrument, not its future promise, in evaluating whether the instrument is a security. Nonetheless, the Howey test at least leaves open the seemingly strange possibility that a token can begin its life as a security, but eventually evolve into a non-security. Recently, a high-ranking Securities and Exchange Commission (SEC) official not only confirmed that he thought this can happen, but even gave examples of factors that may help in determining when a token that was a security may no longer be a security.
Client Highlights
12.06.17
Volta Energy Technologies Launches as a New Model for Advancing Energy Storage Technologies
On December 6, 2017, Volta Energy Technologies, a start-up that identifies and invests in battery and energy storage technology, announced that it has launched a new model to assess the crowded field of battery and energy storage innovations and invest in those breakthroughs with the greatest promise for commercial application. In addition, the company said that Exelon, the nation's largest producer of emissions-free energy and the largest utility company by customer count, and Albemarle, a leading lithium supplier for energy storage and other applications, have partnered together to become founding strategic investors of Volta. The two companies have committed to fund Volta to identify and invest in promising new energy storage technologies. Wilson Sonsini Goodrich & Rosati represented Volta in the partnership agreement.