The Block – In a story about the collapse of Cryto firm FTX, Healthy Markets Executive Director Tyler Gellasch told The Block the language in the deck could raise major legal red flags, in part because entrepreneurs soliciting funds need to disclose risk.
“This is a flashing red-flag for investigators. these types of documents are likely to be an exhibit in court cases.”
“Promising high returns with ‘no risk’ is a massive red flag for sophisticated investors and is bound to give rise to criminal and civil investigations,” he said. The offering appears to be akin to an unregulated offering of a debt security instrument, he said. Historically, regulators and investors “look extremely skeptically on low-risk/high return investment opportunities—especially low interest rate environment.” (Full Story).