In 2017, a pair of young Houston lawyers focused on defending drunk drivers.
The next year, they pivoted to initial coin offerings.
Houston attorney Adam J. Wolfe signed at least 14 Form Ds for 9 different cryptotoken-related ventures as the “legal counsel” in 2018.
Based on a MarketWatch analysis of ICO-related fundraising activity related to crypto-assets, no other lawyer appears on as many Form D filings at the Securities and Exchange Commission.
Wolfe, and his law partner Michael Miglio, run ICO Law Group in Houston set up in 2018 as a division of their law firm WolfeMiglio LLP, opened in Nov. 2017 right after they both graduated from Indiana University Law School.
WolfeMiglio LLP focuses on defending those accused of driving under the influence or helping folks who want to sue for personal injury claims or face bankruptcy or foreclosure.
Despite their youth, relative lack of legal experience and location in Houston instead of New York or London, these two young lawyers pivoted from doing DUI defense to becoming the most prolific lawyers in the SEC-sanctioned initial coin offering, or ICO, game in 2018.
A spokesman for the SEC did not immediately respond to a request for comment on this story.
ICO promoters gain SEC-sanctioned access to accredited investors through Form D, as first reported by MarketWatch in February of 2017. Form Ds are notices filed by a company for an offering that is exempt from full SEC registration requirements. The key criteria for the Form D exemption is that only “accredited investors,” that is, individuals that have a net worth of over $1 million, or that have consistently made over $200,000 per year in income, or companies that have over $5 million in assets, can invest.
Companies don’t have to file the Form D before the offering takes place, but instead within 15 days after the first sale of securities in the offering.
Read: ICOs continue to raise money via SEC back door
MarketWatch asked the ICO Law Group and Wolfe and Miglio via email how their clients had found them.
“We do a considerable amount of internet marketing; so for the most part, our clients find us,” wrote Wolfe. “We also do a large amount of outreach in the cryptocurrency community to keep our finger on the market and regulatory pulse as much as we can.”
“We pivoted to a cryptocurrency practice in 2018 so we weren’t involved in any filings before 2018,” Wolfe wrote MarketWatch in the email.
Miglio’s bio on the ICO Law Group site says he worked for Tilleke & Gibbins in Bangkok, Thailand and DLA Piper in Singapore. His LinkedIn profile also cites a stint at the Tampa, Fla. public defender’s office. All of those roles were as an intern. Along the way Miglio says he learned to speak conversational Mandarin.
Wolfe’s biography at ICO Law Group says he practiced criminal defense in Chicago, Illinois and international business law in Tokyo, Japan. LinkedIn elaborates on those credentials as an internship at a law firm in Japan and in the Cook County, Illinois, public defender’s office before teaming up with Miglio to open WolfeMiglio LLP.
Since the beginning of 2018, Wolfe and Miglio have been travelling all over the world for their crypto clients, hobnobbing with the rich and famous in tax havens such as Jersey, Gibraltar, Zug, and Swaziland.
| Form D or D/A Filing Date | ICO Name | Type of Security | Use of Proceeds | Officers | Location |
| 6/22/18 | LareCoin LLC | Debt-Cryptographic Security | Total offering not determined. $100,000 or approximately 3-5% of funds for officers, directors and promoters. | Daniel Fainman | Manalpan, NJ |
| 7/11/18 | LareCoin LLC | Debt-Cryptographic Security | Amendment to note first sale 6/27/2018. | Daniel Fainman | Manalpan, NJ |
| 8/2/18 | PlayChip Foundation LTD | Other - Cryptographic Asset | Total offering not determined. $250,000 for employee salaries. | Daniel Simic | Zetland, Australia |
| 8/2/18 | CriptoHub Corp | Other - Cryptographic Asset | Total offering not determined. $150,000 for executive and employee salaries. | Carlo Ramon Vailatti | Anhangabaú, Brazil |
| 8/27/18 | E-Car Coin LLC | Other - Cryptographic Asset | Total offering not determined. $300,000 for executive/directors salaries | Rafael Amzayan | Reno, NV |
| 8/29/18 | Citus LLC | Other - Cryptographic Asset | Total offering not determined. $250,000 for compensation with $100,000 for the Executive Officer’s salaries and legal | Long Lee | Reno, NV |
| 8/29/18 | Clarity Project (ICO) Ltd. | Other - Cryptographic Asset | Total offering not determined. $500,000 to compensate 4 executive officers and legal. | Luke Smith, Julie Heaven, Aynsley Damery, Steven Briginshaw | Saint Helier, Jersey |
| 9/10/18 | Clarity Project (ICO) Ltd. | Other - Cryptographic Asset | Total offering not determined. $500,000 to compensate 4 executive officers and legal. | Luke Smith, Julie Heaven, Aynsley Damery, Steven Briginshaw | Saint Helier, Jersey |
| 10/4/18 | HYGH AG LTD | Other - Cryptographic Asset | Total offering of $24.2 million, sales commissions of 10% of sales to Müller, with $1 million of proceeds going to executives or “enough to pay back personal loans to the company from executive officers” and at least $100,000 more per executive. | Fritz Frey, Antonius Link, Vincent Müller | Zug, Swaziland |
| 10/10/18 | HYGH AG LTD | Other - Cryptographic Asset Assigning Pro-Rata Profit Sharing Right | Total offering of $24.2 million, sales commissions of 10% of sales to Müller, with $1 million of proceeds going to executives or “enough to pay back personal loans to the company from executive officers” and at least $100,000 more per executive. | Fritz Frey, Antonius Link, Vincent Müller | Zug, Swaziland |
| 10/25/18 | E-Car Coin LLC | Other - Cryptographic Asset | Total offering not determined. $300,000 for executive/directors salaries. | Rafael Amzayan | Reno, NV |
| 11/5/18 | Clarity Project (ICO) Ltd. | Other - Cryptographic Asset | Total offering not determined. $500,000 to compensate 4 executive officers and legal and $2,500 sales commission to Damery. | Luke Smith, Julie Heaven, Aynsley Damery, Steven Briginshaw | Saint Helier, Jersey |
| 11/7/18 | NOIA Network LTD. | Other - Cryptographic Asset | $2 million “funds were raised from friends & family as well as a VC firm. No money has been solicited from, nor taken from, any US persons.” Sales commissions of $25,000 equivalent to 2%-8% of proceeds planned. $1 million of total proceeds will to go to officers, directors, promoters. Approximately 15% of proceeds planned to pay the salaries of executive team. | Kipras Kazlauskas, Domantas Jaskunas, Domas Povilauskas, Justinas Valutavicius, Kipras Kazkaysjas (sales) | Gibraltar |
| 12/10/18 | Preferendum LLC | Other - Cryptographic Credit to be used to purchase advertising space and/or to interact with and use functions on web platform. | $250,000 to officers, directors and promoters. | Juan Carlos Marcelino Fernandez Lazo | Reno, NV |
Source: MarketWatch analysis of Securities and Exchange Commission Form D filings
MarketWatch asked Wolfe why only two projects had a total offering amount shown on their Form D. “HYGH is a project based in Europe which was considerably further along in the development of their project than most,” wrote Wolfe. “As such, they knew and had a realistic idea of, how much capital they needed to achieve their goals.”
Larecoin LLC’s website says it’s a new cryptocurrency for tokenizing tuition payments, scholarships and student debt. It’s touted as an “alternative payment method for other higher education related costs such as housing, meal plans, books and even transportation.”
In a press release on May 29, 2018, the company announced a partnership with Wolfe and Miglio and their ICO Law Group. Larecoin said that ICO Law Group had “formally accepted an equity stake of an unknown amount” in Larecoin and WolfeMiglio LLP would be “forming and streamlining an in-house legal division for all legal, compliance, tax, and filings” for the initiative, “with plans to file appropriate exemptions with the SEC in June 2018.”
Wolfe denied getting an equity stake, writing, “we do not have an equity stake in Larecoin, nor in any other project that has retained us. As for the commonality of this structure, I have heard of firms taking unorthodox payment such as equity in exchange for their services. I imagine this is mainly because many of these projects are startup companies and have limited funds in their beginning stages.”
Professor Abbe Smith of Georgetown University Law school, who teaches and writes on legal ethics, is emphatic. “In my view, lawyers cannot take equity shares in a case in which they provided legal services. That’s a conflict of interest.”
David Hoffman, a professor of law at the University of Pennsylvania Law School, believes lawyers and their firms are allowed to take equity stakes in clients’ projects, but they have to “very careful of the conflicts.” He co-authored a paper in Dec. 2018 called “Coin-Operated Capitalism” that says it’s “the legal literature’s first detailed analysis of the inner workings of initial coin offerings.” The paper analyzes ICO contracts, “white papers,” and other contract-like documents for the fifty top-grossing ICOs of 2017 and analyzes how such projects’ software code reflected (or failed to reflect) their contractual promises.
Wolfe and Miglio’s Larecoin client is Daniel Fainman, a Manalpan, New Jersey, actor who runs the company from his home. Fainman has an IMDB.com profile that describes him as an “energetic, positive, multi-skilled and seasoned serial entrepreneur extraordinaire.”
Fainman’s IMDB profile also says he’s “known for his fierce tactics when it comes to writing and producing film.”
Wolfe filed Larecoin LLC’s Form D with the SEC on June 22, initially for an undisclosed new offering amount related to a debt offering characterized as a “cryptographic security” and where an estimated $100,000, or 3% to 5% of funds raised, would be used to compensate officers, directors, promoters and others. The company, incorporated in Nevada in 2018, has no revenue.
Fainman and Larecoin LLC did not respond to a request for comment on the disputed equity investment by WolfeMiglio LLP.
MarketWatch asked Wolfe what he and Miglio learned during the last year about how to meet SEC compliance requirements for ICOs and if they had met with regulators.
“We learned that the SEC is generally very open to discussion,” Wolfe wrote, “despite what may be the common consensus. We contact the SEC for clarification on a fairly regular basis and they are generally pretty willing to have a conversation with us. We advise all of our clients to be fully compliant with U.S. securities laws and regulations.”
Wolfe wrote that, “in our experience, it appears that U.S. investors are more willing to invest in projects that make thorough U.S. compliance efforts. We aim to assist our clients with these compliance efforts.”
In response to a MarketWatch question about what’s next, Wolfe wrote, “We think that we will see a lot of development in the projects that currently exist, as well as an increased desire for cryptocurrency and blockchain projects to enter into the U.S. market. As long as these projects are willing to comply with U.S. law, we can expect to see an increase in both the use of blockchain technology and an increase in perceived legitimacy in cryptocurrency projects.”
The ICO Law Group website also lists involvement in more crypto-related projects that were funded in other ways, including crowdfunding but not via Form D filings: Latium, Bexam, Leep Network, Troventum, Shopper Coin, Delta, askfm, and smartimpact.
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