C4C Legal Memorandum

MEMORANDUM

December 17, 2022

To:

From: Allison Lartigue, Certified Litigation Paralegal, United States, Allison C. Lartigue LLC

Subject: Legal Memorandum on Client’s Query related to Token Sale Structure

1. Background / Query:

   1. Crypto4ac.net (the “Client”) is a co-founder of a cryptocurrency token project (“Project”). With respect to the token sale structure of the Project, the Client has raised the following query:

2. Pursuant to the Project’s C4C whitepaper (“C4C Whitepaper”) and laws in the U.S., whether the current token sale structure of the Project can be passed to an exchange?

3. Discussion & Analysis of Query:

   1. According to the C4C Whitepaper, after the successful completion of private sale, the investors will receive their $C4C token which can be exchanged on C4C DEX platform. From this, it is clear that, as far as the C4C Whitepaper is concerned, the Project’s token sale structure can be passed to an exchange.

   2. Be that as it may, there are certain regulatory requirements with respect to the securities laws in the U.S. are to be met. In this regard, reference is made to Williams v. Block One, 2022 U.S. Dist. LEXIS 171550, *13 in which it was held that “the SEC has advised, in the context of online platforms for the purchase and sale of cryptocurrencies, that ‘a platform that offers trading of digital assets that are securities and operates as an ‘exchange,’ as defined by the federal securities laws, must register with the Commission as a national securities exchange or operate pursuant to an exemption from registration.’” [Emphasis Added] Hence, the registration of exchange is necessary in case of domestic exchange.

   3. What constitutes as a domestic exchange was elaborated by the court in SEC v. Ripple Labs, Inc., 2022 U.S. Dist. LEXIS 43497, *3; it was held that “parties may show that a transaction occurred domestically by alleging specific facts that suggest that irrevocable liability attached or title was transferred in the United States . . these facts may include those ‘concerning the formation of the contracts, the placement of purchase orders, the passing of title, or the exchange of money.’ [Emphasis Added]

   4. From a bare reading of this, the Client needs to assess whether any of the elements of Project’s token sale structure and its passing on to an exchange is occurring within the jurisdiction of U.S. If that is the case, then the securities regulation need to be complied with, or otherwise the Client may face liabilities under the Securities Act 1933.

4. Conclusion

   1. In view of the foregoing, the Client may:

5. pass the token sale structure of the Project to an exchange under the C4C Whitepaper; and

6. comply with the securities laws/regulations in the U.S. if the exchange of token sale constitutes a domestic exchange in U.S.