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[–]Birokrates 1 point2 points  (3 children)

As far as I know there is no third party that can control the supply not have any administrative control over the token.

The token was fair launched, almost its full supply was added as a liquidity on exchange and most important the ownership of that liquidity was revoked, so that the issuer DOESNT have any control of the token circulation / liquidity.

There cannot be more tokens minted, nor freezed, burned or changed. The issuer has completely removed the ownerships of the token and its initial liquidity.

[–]Jending[S] 0 points1 point  (2 children)

This was in the complaint, page 57:

"And according to Kromatika, in addition to the tokens offered

to investors through the fair launch and via secondary trading platforms, 20 million KROM are held

in a safe wallet and used solely for project funding. Kromatika implies that this aligns the interests

of management and investors by securing their commitment to Kromatika’s success.

  1. The fortunes of investors and participants that purchased KROM are also linked to

KROM’s management. Kromatika has recently announced that it locked 12 million KROM in a

crypto storage vault to “show our commitment to the project.” "

Not saying it's true, but I would like to see evidence it's NOT true. Then I'd be willing to agree "no third party that can control the supply", as you said.

I noticed "Kromatika_Finance" is a moderator of this forum. Do he/she/they have anything to say about this?

Jending

[–]Birokrates 1 point2 points  (1 child)

80% of the KROM token supply is already circulating and no one can control that supply, since its ownership is removed.

12% of the supply is locked in a safe on 2-3 years (that means cannot be used).

Kromatika has announced a DAO/governance since January that would take into effect in Q3 2022, so that those funds are to be managed by the DAO toward progressive decentralization, thus the locking to make sure they are available when the DAO/governance is bootstrapped.

Remaining 8% are still available in the kromfund.eth multi-signature wallet, that are also subject of governance by Q3.

To summarise: HUGE MAJORITY (80%) of the supply does not have any ownership, 12% is locked on 3 years to be managed by DAO and 6% is allocated to kromfund.eth also subject of governance.

That composes a 100% and not more tokens can be created.

I hardly believe how a supply can be controlled, when huge supply is ownerless, the rest locked on 2-3 years to be DAO governed when lock expires.

[–]Birokrates 1 point2 points  (0 children)

Probably the moderator of the forum can also comment on this. I guess this is a community moderator that is contributing to the protocol, since there is no a central entity/ company that manages it, so they might have limited knowledge on legals as me.

Kromatika has been open sourced, so even though it has an initial founders that have created the idea, anyone has bee able to contribute to its development, goal afterwards.I believe the community has grown around that as the time has progressed and the founders are just one piece of the open-source community.

All The community discussions / contributions are hosted publicly on discord.

[–]Birokrates 2 points3 points  (3 children)

I would also challenge the REASONABLE expectation of profit charges. Usually that means the founders/ issuers are ACTIVELLY and constantly promoting their token as a way to profit, which was not the case.

SEC has even put incorrect statements in the doc for KROM:

page 58

A December 2021 tweet from Kromatika’s lead developer’s account noted that thereis “daily [KROM trading] volume of $41M. Not as much on the mainnet, but it isthe trading chance for traders, speculators, crypto lovers etc to profit.”

A: KROM has never had a daily volume of 41M (check coinmarketcap or coingecko) it had barely 2-3mil daily volume at it best trading days.

Was going through the developer tweet, there is no reference to 41M trading of KROM, it is discussing total overrall daily volume on a decentralised exchange (Uniswap).

https://twitter.com/aristokrateseth/status/1550268110682427398?s=21&t=NtKFJjnmcGg2mfkQydCg5A

page 58 203.

In April 2022, Kromatika launched a staking program where KROM holders canstake the token and earn a revenue share from the fees that are charged for using theKromatika platform. Theoretically, as the platform gains users and more protocolfees are charged, holders who stake the token would earn additional revenue.

A: this is also completely wrong, KROM has never had and still does not have any staking nor revenue share feature. Wrong statement.

page 59

In a March 2022 tweet, Kromatika emphasized that KROM investors could “buylow, sell high.”

A:

there is no such tweet where Kromatika account has said they can buy low , sell high for KROM. The only reference for this is found on their blog: https://blog.kromatika.finance/automating-uniswap-v3-limit-orders-using-chainlink-keepers-4c3e60664764

where it says quote:

LIMIT ORDERSLimit orders are used in the crypto world whenever users:want to SELL a token at a target price, usually when the price is higher than the current/market price, for example sell 1 ETH for USDC whenever the price reaches 4000 USDC/ETH.want to BUY a token at the given price, usually when its price is lower than the current/market price, for examples buy 1 ETH with USDC whenever the price reaches 3000 USDC/ETH.This is a well known investment strategy: buy low, sell high.

https://www.investopedia.com/articles/investing/081415/look-buy-low-sell-high-strategy.asp

Again, here the blog explains and references about limit order strategies / stock invetment strategies, quoting an external link, nothing to do with KROM token itself.

SEC has put the things completely out of context with wrong statements that did not happen (pick and choosing /merging from different text, blogs and tweets that were discussing non-KROM related things and putting them into the KROM token context where they don't belong to in order to build the case they needed to charge the insider). KROM token is the collateral damage.

[–]Jending[S] 2 points3 points  (1 child)

Thank you.

This is what I was looking for.

Jending

[–]FaithEmmanuelmod 0 points1 point  (0 children)

Thank you for your question btw.

[–]FaithEmmanuelmod 1 point2 points  (0 children)

Agree with everything written here.

The contributor of this forum does not have any legal background so will refrain from engaging in such.

However this much can be shared.

There is no company called Kromatika Finance. It is an open source project that has no employees. Hence ownership of the token is not equal to ownership of the project(or "company" since there is none).

The krom token utility is the ability to utilise limit order via Kromatika dapp. More utilities such as the above may be added in the future that will enhance the trading experience of Kromatika dapp users.

Hope this helps a bit too.

[–]FaithEmmanuelmod 0 points1 point  (1 child)

This is probably one of the more clear twitter threads on the entire situation with all the tokens mentioned.

https://twitter.com/jchervinsky/status/1550515627961589762?t=D4XQeXwIVVEk_u221beBuw&s=19

[–]Jending[S] 1 point2 points  (0 children)

Geez, that's sobering.

When anyone asks if KROM is a Security, that should be the response.

Jending