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first_img WHUF Founder: When the token price is below the ICO price, redeeming tokens will result in destruction

The founder of the WHUF project posted on X that the WHUF trading price is below the ICO price. He stated that the price guarantee is functioning as designed, and the redeemed WHUF will be destroyed and permanently removed from circulation. The team originally expected this mechanism to reduce sell-offs close to $3.57, but 23% of the original purchase amount did not receive guarantees within the protection window, which currently constitutes the largest outflow.The founder mentioned that the team focuses liquidity on Coinbase, hiring two market makers and allocating 175 basis points of centralized exchange liquidity, with only about 25 basis points on-chain. The launch pool has about 20,000 WHUF and less than $100,000 USDC, with auction buyers selling about 101,000 WHUF in the first hour after unlocking. A single $10,000 sell order caused the price to fluctuate nearly 20%. Of the 1,402 auction wallets, 298 sold, with 92% occurring in the first 3 hours. The team refused to pay for listings, and the exchange's +/-2% depth sometimes only amounts to $10,000 to $40,000. Of the $7.14 million raised from the ICO, $7.14 million has been reserved for price protection.The founder stated that if the auction is redone, they would choose Uniswap CCA and use the Sonar platform fees to inject liquidity. Redemptions must check against the sanctions list, and Sumsub has flagged 5 individuals who did not pass, with reasons including terrorism and crime. Redemptions for non-sanctioned users have been automated, and the team will return USDC in batches and destroy the corresponding WHUF, which is expected to take at least several days. At the time of the project's issuance, 20% of the supply was sold, mainly raised from the community, and provided protocol usage rewards and ICO price protection.

Viewpoint: The "Cryptocurrency Asset Regulation" proposal introduced by the U.S. SEC may not trigger a new wave of ICO frenzy

According to Cointelegraph, the SEC has released proposed rules for the "Regulation Crypto Assets," setting two exemptions for specific investment contracts involving crypto assets: allowing startups to raise up to $5 million in a one-time financing within four years; and allowing qualified issuers to raise up to $75 million within any 12-month period, with the possibility of conducting different rounds of issuance in subsequent years.Drew Hinkes, a partner at Winston & Strawn, stated that as long as each round of financing is an independent issuance, projects could theoretically raise $75 million every 12 months. Lilya Tessler, head of Sidley's fintech and blockchain practice, noted that subsequent financing is not automatically approved; issuers must resubmit offering documents, undergo SEC staff review, continuously submit annual and semi-annual reports, and disclose funds raised through the exemption in the past 12 months to confirm they have not exceeded the financing cap. The proposed rules also limit the participation scale of non-qualified investors, with their purchase amount not exceeding 10% of the higher of their personal income or net worth.Lee Reiners, a financial regulation expert at Duke University, indicated that the limited first-round cap may make early token allocations more attractive, but the rule is unlikely to replicate the ICO boom of 2017. Among projects that raised funds through ICOs from 2017 to 2019, as many as 90% ultimately failed.The SEC expects that approximately 130 issuances per year will utilize the above two exemptions, with about 475 issuers potentially using a broader investment contract safe harbor. The proposed rules will provide token issuers with a clearer path for financing in the U.S. compared to the current system, but secondary market trading may still exist in a gray area of securities attributes. The proposal stipulates that investment contracts related to crypto assets may continue to trade in the secondary market along with token transfers until the asset is separated from the issuer's statements or commitments.Drew Hinkes stated that if non-security tokens transfer investment contracts from seller to buyer, such transactions may still be considered securities transactions, impacting trading platforms. Lee Reiners also mentioned that some issuers may meet the formal requirements for exemptions but still influence token value through team management efforts, concentrated insider holdings, and aggressive promotion.
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