1. Since certain news stories related to the SEC settlement and cease-and-desist order with CoinAlpha Advisors LLC contain errors, I wanted to post the facts to dispel any confusion. sec.gov/litigation/adm…
2. CoinAlpha Advisors LLC is a wholly separate entity from @CoinAlphaInc, the VC-backed technology company which is our core business.
3. It was the GP for a hedge fund we created as the first application using our open source Fund Protocol, which uses smart contracts to perform the functions of a traditional fund administrator. github.com/CoinAlpha/fund…
4. After launching the fund, we filed a Form D with the SEC utilizing Rule 506(b). Under this exemption, used by most hedge funds and startups, investors self-certify that they qualify as “accredited investors” but the issuer does not need to verify their status.
5. “General solicitation” is not allowed under Rule 506(b). The article below gives a broad overview of what that entails. blog.verifyinvestor.com/blog/2016/5/4/…
6. We maintained a website that described the fund and contained a contact form for prospective investors. We also wrote about the fund in blog posts and spoke about it at blockchain conferences and in media interviews.
7. After the SEC contacted us, we hired @VerifyInvestor who independently verified that each and every investor in the fund was an accredited investor.
8. Rather than litigating the case, we felt that winding down the fund, making investors whole, refunding all fees, and paying a small penalty was the most efficient way to close it out.
9. The fund, which utilized a quant trend-following strategy to trade BTC and ETH, operated from Oct 2017 to Sept 2018. Over its life, the fund performed +22% net of fees, relative to BTC (+13%) and ETH (-29%).
10. We’re glad to move on so that we can focus on building new technologies like hummingbot.io, an open source market making client that brings liquidity to DEXs. @0xProject @Aurora_dao @KyberNetwork @airswap
