The Cayman Connection

Uberstate Inc. has incorporated an unregistered tokenized fund and operating company in the Cayman Islands for the purpose of safe harbour and insulation of regulatory bodies like the North American SEC, whose point of view on blockchain and digital assets like RIT may be volatile.

Currently, regulators have yet to come to a consensus about whether or not alternative coins or utilities tokens represent an investment that is securities based.  This widening gap is accelerated by the proliferation of new issuers in the token market place and easy access to blockchain technology on many different platforms. There are also no clear rules, or exemptions, that define blockchain filings.

The growth of this market has given rise to new securities tokens platforms, that claim they are able to issue restricted tokens based on rules that are currently in place.

Unfortunately, there is very little traction with these platforms currently. Issuers are unable to program and release their own securities tokens. Many challenges exist as to who is programming the tokens and which jurisdictions globally compliance is actually being met ; this also creates friction with regulators for new issuers.

Compliance, poses a cost based barrier to entry for new issuers to the market place, as there are often large fees associated with out dated compliance regimes that currently exist under private issuers exemptions or national financial instruments.

Securities filings, that allow entrepreneurs to raise capital for their ventures legally do not align with the blockchain marketplace.  Additionally, because of the track record of Initial Coin Offerings there may be additional provincial or state made legislation that prevent the trading of blockchain on a peer to peer basis.

This market environment does not favor liquidity or transparency it merely moves an outdated securities regime forward. There is little innovation on the part of regulators to keep up with the ever evolving blockchain market and the needs of the technology to be supported.

The Cayman Islands support the growth of emerging markets like blockchain investment and collaborate within their regulatory framework, to support the companies involved in the space.

For over half a century investors the world over have taken advantage of Cayman’s pro business investment strategies by registering off shore funds and companies in special economic zones that protect growth.

EOS  which raised over 4 billion dollars in 2018 and other large blockchain issuers have used this strategy to offset perceived market risk and manage taxes and gains effectively or their clients and corporations. Cayman Enterprise City a special economic zone set up by the Cayman Islands government has supportive legislation for blockchain enterprises.

The Immediate benefits to clients who purchase RIT are noted below.

  • 100% exemption from income tax
  • 100% exemption from corporate tax
  • 100% exemption from capital gains tax
  • Supportive compliance structure for utilities tokens and funds dealing in Blockchain.
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