Adam S. Tracy Explains Wyoming Trusts & Offshore ICOs

Adam Tracy
6 min readSep 1, 2018


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So to clarify an issue that keeps coming up and a lot of you have you sort of hit me up with questions and I always appreciate the interest but one question I keep getting is I want to do an icy. Oh, I don’t want to go offshore with my Ico entity. But I’m not going to sell to u.s. Citizens. Can I do it? And the answer is yes, right. You absolutely can. You know, your Ico isn’t dictated right? You have to think of the terms of offering and when the best way to sort of describe an offering which is a legal term of art is that you are throwing your Asian sort of out into space right out into the void and you don’t know who’s going to Echo back, right? That’s an offering you don’t necessarily know who your who your kind of approaching you may generally know but you don’t know from like an individual standpoint. And so, you know, when you look at regulation ass, which is the Securities exemption that relates to sales to non us residents that’s always been sort of wide open right that there are no restrictions in terms of accredited non-accredited.

There are no restrictions in terms of manner of solicitation and they’re never work right. If you go to pre jobs act a there wasn’t it wasn’t those restrictions either. So when you’re looking at a offshore Ico from a domestic structure, you can definitely do it because ultimately even if you’re selling a security token, you’re relying on regulation s which allows you to sort of sell this and in a general Manner and to not have to worry about the accredited and non-accredited delineation. So that having been said you need to Very very very cognizant and careful that you aren’t somehow whether accidentally or not soliciting u.s. U.s. Residents, of course, but the question becomes well, where do I domicile right in the states? And you know, I’ve addressed that before I think Wyoming right now, even you know in the non crypto context is your ideal domicile now that they’ve passed crypto friendly legislation. I think it’s really the only place to incorporate now want to take that a step further because when you talk about offshore you’re talking about tax benefits, you’re talking about asset protection benefits and I want to talk about specifically about the asset protection benefits and you know, people don’t realize this because you read a lot about these Alaskan spendthrift trust, right which are these self settled trust meaning of trust that you create and settle and you name yourself the beneficiary and there’s a lot of Talk about how those are creditor proof. Well, Wyoming has what I believe a even better statue.

Okay, and it allows you to create a trust put Assets in trust and be the name yourself the beneficiary of that trust and those assets can be protected from predators. Right and I’ll get to why that’s important in an IC o — — context in a second. But what I really really like about it, which you do not see in Alaska, but you see an offshore structures like the Cook Islands. I’ve talked about Cook Islands trust before and they have what’s called The Protector, right? You have a trust trustee who sort of is the manager of the trust assets and then you have what’s called a protector and that protector has certain limited limited abilities right that trigger at certain occasions. So in Wyoming, right that protector who could be like a close friend or suddenly that has the ability to control distributions at certain times has the ability to change the domicile of the trust has these abilities These that when it comes down to litigation and it comes down to creditors pursuing the trust or the individual has put the Assets in the trust that protector comes into play and can take steps that will minimize the ability of that creditor to recover. What is in trust right recover the assets of say you you being the trust settlor, right? You being the trust person who formed the trust now combine that with no state income tax. Nope, you know break privacy laws think Wyoming, right the truss structure is ideal and it’s preferable and far less expensive than what you’ll find in Alaska. So I I like that now, why do I like it in connection with the offshore Ico even a domestic Ico is that when you have an entity right any sort of entity and you’re talking about asset protection strategies and this goes beyond just crypto, but when you’re dealing with crypto you’re dealing with something that’s super high risk at the moment.

Well, one of the great structures you can create is to take your Let’s say your Wyoming LLC and those membership units that you own and put those in trust right put those former Wyoming trust put your shares right or your membership units of your Wyoming entity interest. So they are the nominal owner of that and you remain the beneficiary so you remain remain in control of your company, but you put a wall in between the company’s activities additional wall in between the company’s activities in your personal assets and your interest in that and so a lot of these crypto companies, right especially as IC o — — companies their top heavy they’re super valuable in terms of Ip. Right and that’s what people ultimately would go after if you’re involved in litigation. So one of the perfect ways to insulate IP and other like fixed assets and especially intangible fixed assets, like patents Technologies all sorts of things like that is to do this sort of entity trust structure where the trust Remains the nominal You’re older. You may Remain the beneficiary of the trust you remain. Can you keep control? You keep the benefits of owning the shares but you’ve put this wall in between the actions of the company and the actions of a creditor. And so it’s a beautiful structure for something like an offshore Ico or even a domestic Ico insomuch that you’re able to to insulate yourself further than just the normal protections of like an LLC or or a corporation. So again, Wyoming keep, you know, love Wyoming, there’s like ten people there great place.

I haven’t been there but phenomenal phenomenal asset protection laws phenomenal corporate laws becoming very crypto friendly, which is great and I think when you when you add the trust structure to it, which is really a minimal cost and it’s sort of a minimal event with this protector aspect that you really only see In offshore trust. I think it makes it really one of one of your best your best options domestically in terms of asset protection and and insulating yourself from from potential creditors litigation things like that, which obviously come up in business and they come up or tend to come up or could come up a lot in you know more high risk Cutting Edge businesses like blockchain and cryptocurrency. So you have any questions as always reach out to me love talking to you guys Madam Tracy. I’ll check out.

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A former competitive rugby player, serial entrepreneur and, trader attorney, Adam S. Tracy offers over 17 years of progressive legal and compliance experience in the areas of corporate, commodities, cryptocurrency, litigation, payments and securities law. Adam’s experience ranges from commodities trader for oil giant BP, initial public offerings, M&A, to initial coin offerings, having represented both startups to NASDAQ-listed entities. As an early Bitcoin adapter, Adam has promoted growth of cryptocurrency and offers a unique approach to representing crypto-clients. Based in Chicago, IL, Adam graduated from the University of Notre Dame with dual degrees in Finance and Computer Applications and would later obtain his J.D. and M.B.A. from DePaul University. Adam lives outside Chicago with his six animals, which is illegal where he lives.

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