In a recent interview for “The Street”, Mark Cuban argued that wash trades on crypto exchanges could cause the next crypto implosion and drive Bitcoin price even lower (Mark Cuban Warns of Potential New Crypto Scandal and Fraud – TheStreet). Wash trading usually involves a trader buying and selling a security for the purpose of artificially inflating its price while creating an illusion of liquidity. This practice is illegal in most jurisdictions, including in the US, but only when it comes to the stock markets – not for crypto. The rather flex ..read more

After a long wait, Brazil’s lower house of Congress approved in November a bill that will take the cryptocurrencies regulatory framework in Brazil a major step forward. It is important to note the timing of this much anticipated event, during “crypto winter”, which is probably another sign that the crypto revolution has not yet come to a holt. Far from it. Brazil is one of the top 10 Crypto globally active markets according to Chainalysis data (2022) so it is safe to say that the bill, once finally approved by outgoing president Jair Bolsonaro, has a potential to hugely and favorably affect th ..read more

Whether your new NFT project involves the issuance of other crypto tokens or not, you are probably aware of how important it is to avoid being classified as an issuer of securities by regulatory bodies like the U.S. Securities and exchange commission (SEC). While the SEC has not yet issued any formal guidance on what can make NFTs be considered as securities, they are already warning of its intention to regulate the industry and have even begun to investigate specific projects and their owners. “Pure” NFTs are Probably OK It is rather clear that “pure” or “art” NFTs, which are not sold as part ..read more

It’s a known fact that online gambling is illegal in Israel. However, it’s a much lesser known fact that the Israeli law’s definition for “gambling” is much wider than in many other jurisdictions. In short, participants don’t have to pay anything for their right to participate in the activity for it to be considered as gambling. This means that a social gaming site which is completely free to play might be considered illegal gambling if participants can gain anything of value (a “prize”) if they win. The “prize” does not have to be money and, for example, virtual tokens which can be used to pu ..read more

Despite online gambling being an illegal activity in Israel, Israeli companies are involved in large numbers in the industry, including by providing “ancillary” services to the gambling companies such as development services or marketing. Where such “support” activities are performed from Israel, which is not, on its face, illegal under Israeli law, such companies equip themselves with legal opinions confirming the legality of the activity, in order to avoid criminal liability. In recent years, the industry has seen stricter regulation, including with respect to KYC and AML. Among others, it’s ..read more

Just closed your seed round at an incredibly high valuation? Well done and good luck! And here’s hoping that it does not become a double-edged sword. Raising money is not an easy task. Typically, it involves months of tedious meetings and games of tag with investors, with the response ending up being “no” 99% of the time. However, sometimes everything seems to go your way and you manage to find an enthusiastic investor that loves your startup so much that he or she agrees to invest based on precisely the valuation you asked for. Nothing wrong with being bold and ambitious right?  Unfortun ..read more

Elon Musk once said that being an entrepreneur sometimes feels like “eating glass and staring into the abyss of death.” That said, it is universally acknowledged that being an internet entrepreneur is a walk in the park compared with being a hardware entrepreneur. Developing and selling hardware is a nightmare. The life cycle of hardware products is considerably longer and more expensive than that of software, so companies need to raise more money along the process and stand a higher risk of running out of it. And let’s not forget about pains such as scalability issues, inventory, shipping, in ..read more

As a lawyer and mentor, I often meet entrepreneurs only to realize, within minutes of talking, that they simply are not going to make it. This has nothing to do with how talented, nice, and engaging these people are. It has everything to do with the fact that they are in the wrong startup. The passion, the motivation, even the skills and experience—they are all there. They just not right for this particular ride. The chances of seeing your startup through to a glorious exit, or even of getting the funding you need to stay afloat, are different depending on the type of startup. Whether you are ..read more

Raising money for your startup through a convertible note means that instead of issuing shares to investors, you promise them that when you raise an equity financing round—and in certain other scenarios, such as if you didn’t raise any more money within an agreed period—you would convert their money into shares. It is customary to give convertible note investors a discount (usually 20%) on the share price of the next equity financing round. The logic behind this discount is the risk that the convertible investor took by entering the company at an early stage. As I have written before, converti ..read more

For most startups, international travel is an essential part of doing business. Living out of a suitcase can be challenging but also rewarding, and if your business is international and your clients are spread around the globe, it is simply what you have to do. Since a young startup will typically have a very limited budget for travel, business trips should be very carefully chosen, planned and executed. Unfortunately, many entrepreneurs waste precious time and money on ineffective business trips and are later surprised that nothing much happened. This is especially frustrating if you have on ..read more