TL;DR: “I was referred to a lawyer,” SLP token HONK co-founder Keith Patrick told CoinSpice about his project’s recent attempt to get listed on a cryptocurrency exchange. To accomplish that goal meant purchasing a complete legal review of HONK. “The [first lawyer I contacted] wanted $4,250. He’s ripping people off, in my opinion,” Patrick insisted.
HONK Token Exchange Listing Legal Review by a Lawyer Varied Greatly in Price
The Simple Ledger Protocol (SLP) for tokens on the Bitcoin Cash (BCH) blockchain birthed a wave of creativity. A number of tokens were minted with relative ease, some with real use cases, others as a lark, and still more somewhere in-between. SLP token evolution now includes stablecoins, with the most popular, Tether USDT, recently coming aboard.
HONK, while not a stablecoin, was created to take advantage of the popular Clown World meme. It gained popularity quickly, and a prized goal for such a project is to be listed on cryptocurrency exchanges, where it can experience price discovery and reveal an objective value. That, in turn, can spur on potential investors to employ the token in a variety of ways.
To get a token listed, however, depends entirely on an exchange. Some list everything, and both the token and exchange are somewhat devalued in the process. Other exchanges are more compliant with ever-increasing regulation and governments’ demand. To protect the exchange and traders, many require full legal review of a token. Patrick (@k_patrick on Telegram), co-founder of HONK, expressed sticker shock at one exchange’s referred lawyer for the service.
Aggressive and Condescending
The lawyer, based in California, Patrick claims, wanted more than $4,000 for the service. “I was able to find a guy to do it for 150 bucks, with the agreement he gets $500 for future legal reviews,” Patrick revealed. “He did it and HONK was accepted by [the exchange] for the listing. He’s done one other for $500.” With a little bit of digging, Patrick was able to find a lawyer in Bucharest, Romania, Bogdan Trăilescu (@bogdan_trailescu on Telegram).
All told, Patrick said projects like HONK can hire Trăilescu for $900 to do the exchange legal review, a savings of more than $3,300. “I want to help small severely under-budgeted projects like HONK not get ripped off,” he insisted to CoinSpice. “This is something that most legal departments of exchanges require to list. The legal opinion is to confirm the asset is a utility token and not a security,” Patrick explained.
According to Patrick, the referred lawyer in California “told me that he would charge $4,250 and that [his quote was] 10% cheaper than anybody else. He also said they can cost up to $100k each. I think the guy was just full of shit. Once I told him the price was too much, he started responding more condescending-like. He was very aggressive in letting me know that he was the cheapest and if I use any of those ‘cut-rate’ lawyers that I would be screwing my self over in the long run.”
Not Getting Ripped Off, Partnering Up
Patrick was so unnerved by the first quote and subsequently relieved by discovering the work of Trăilescu, the two have since partnered up. “At the end of the day, this is about getting a competent lawyer to put out a legal opinion on the asset that would be accepted by the exchange, and not getting ripped off. I was able to do that, and want to share it with others,” he assured CoinSpice.
The exchange “accepted [Bogdan Trăilescu’s] legal opinion for HONK, and he also wrote a legal opinion for the SLP asset USDH [(a stablecoin)] and that was also accepted,” Patrick noted. CoinSpice reached out to Trăilescu, asking about the token legal review process for exchanges and his role. “I start by analyzing the white paper issued by the token owner or any other documents describing it, in order to identify its technical properties for my analysis. After reviewing such documents, I try to determine the legal consequences of such technical properties, namely whether the respective token resembles a security or not,” Trăilescu explained.
As for why the price for a review varies so widely, Trăilescu was careful to point out “this field is a very niche and novel one from a legal perspective. Although crypto assets are around for several years, the law is always lagging behind society when regulating its innovations. This means two things: there are only a small number of lawyers recognized and experienced in this field and secondly, the crypto asset regulations are always evolving and changing. What is valid now from a legal perspective in respect of a token, may change tomorrow. Thus every lawyer in this field has to continuously learn and read in order to stay up-to-date on this matter.”
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DYOR: CoinSpice is your home for just spicy crypto things. We’re not affiliated with any cryptocurrency project or token. Each published piece is intended for information purposes only, not investment advice and not in the hope of impacting speculative markets. There are plenty of trading sites and coin-specific advocacy journals out there, we’re neither. CoinSpice strives for rigorous accuracy in our reporting. Information presented here is contingent usually on a host of factors, and the ecosystem moves fast — prices change, projects change, and at warp speed. Do your own research.
DISCLOSURE: The author holds cryptocurrency as part of his financial portfolio, including BCH.