The North American Securities Administrators Association ("NASAA") advised companies utilizing blockchain technology on an "alternative" method of raising capital through initial loan procurements.

NASAA stated that the crowdfunding method known as "initial loan procurement" is an option for raising capital without the "added burden" of creating tokens. NASAA explained that an investor who wishes to invest in an initial loan procurement, must enter certain identifying information on the blockchain, which is also where the legally binding smart contract will be stored. Once this contract is signed and the cryptocurrency is received, the investor will receive annual interest payments. The public nature of the contract offers investors the protection they lack when investing in an initial coin offering, which does not provide any proof of an investor's claim over the assets of the company.

Generally, NASAA advises investors to (i) not invest money they cannot afford to lose, (ii) read the fine print of any initial loan procurement offering, (iii) research the individuals behind the company that is seeking to raise capital and (iv) be wary of scammers using language that provokes emotional reactions.

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