Secondary SAFT markets are specialized platforms or arrangements that enable the trading and transfer of Simple Agreements for Future Tokens (SAFTs) among qualified investors before the underlying cryptocurrency tokens are publicly issued.
Mechanism
These markets function as private over-the-counter (OTC) venues where early-stage investors in blockchain projects can sell their SAFTs to other interested parties. This provides liquidity for pre-launch digital assets that are otherwise illiquid, facilitating early exit opportunities or new entry points for capital.
Methodology
Operation within secondary SAFT markets requires strict adherence to securities regulations, often involving accredited investor verification and compliance with specific transfer restrictions. This framework balances the need for early liquidity with investor protection and regulatory oversight in the nascent stages of crypto project funding.
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