[VSP-0] Addressing Co-founder Rage Quit and Hostile RFV Attempt - A Response to VSP-1 and VSP-2

[mikey]

I’ve added a portion into the original post addressing legal problems with [Proposal] VSP-2 - Dissolve and [Proposal] VSP-1 - Rage Quit. I’ll copy it down below as well.

@mikey

Numerous legal problems with original proposal

As everyone is probably aware crypto projects operate in a highly risky legal space, so any type of distribution proposal which results in monies being paid to token holders would trigger a number of legal risks for all parties who had proposed or affirmatively voted, and create much unfairness across the different token-holders. With a view at arriving at the best outcome for the project we have sought the advice of a number of experienced legal counsel. These are some of the most critical legal red flags:

• $VSTA token is intended to be a utility token and cannot be a security token, period. In order for $VSTA token to be viewed as a non-security token, token holders cannot have any contractual claim to assets of the Foundation or any Vesta entity. This is expressly disclaimed in many places in previously published documentation, e.g. the Vesta Finance VSTA Governance TOKEN Issuance Agreement - Public Round. “Buybacks” are a very common tool in tradfi to return funds to stakeholders so this is viewed very negatively by regulators and allowing such a claim against the $VSTA token would very likely cause $VSTA to be viewed as a security product and cause all participants involved to be viewed as promoters of an unregistered and illegal securities offering.
• The sole purpose of the initial fundraising, as documented in the original roadmap to the public, is that all treasury funds are to be allocated towards the Foundation’s mandate of product development and building out of the Vesta ecosystem of products for usage by community members. If the proposal is passed, there will be no funds to continue development of the Vesta ecosystem. The proposal totally ignores the rights of holders of $VSTA and users of the Vesta product who still wish to continue utilising the Vesta ecosystem, and would potentially trigger lawsuits.

With the numerous legal red flags, we cannot in good faith support the Rage Quit proposal and the Dissolve proposal. Any proposal to move forward would need to take into account all the interests of stakeholders who remain interested in the future progress of the project, while allowing uninterested parties to depart. The Foundation’s mandate is to build the Vesta ecosystem of products for usage by community members, and it has a duty to reject illegal proposals which go against this mandate (e.g. operating $VSTA as an investment scheme). With this said, a new proposal to address “allowing uninterested parties to depart” will come soon.