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Opinion
Matt Levine

There's Not Much Coin to KodakCoin

It is a photo-licensing service with a lot of crypto buzzwords.
Want to raise money? Just shout "blockchain!"

Want to raise money? Just shout "blockchain!"

Photographer: David Becker/Getty Images

Here is Kevin Roose at the New York Times making fun of KodakCoin, the initial coin offering that Eastman Kodak Co. (or at least its licensee) is launching at midnight tonight. I have previously made fun of KodakCoin here; the rough idea seemed to be that Kodak's licensee -- WENN Digital, "a California-based affiliate of a British photo agency that specializes in paparazzi photo licensing" -- will run a blockchain-based system for licensing photographs, combine it with web crawler to make sure no one is using unlicensed photographs, and invent some KodakCoins to pay the photographers. Or something, I don't know; here is Roose:

When we last made fun of this project, three weeks ago, one objection that I raised was that KodakCoin is a security and will only be offered to accredited investors, which will make it hard to use it to pay for photos. This is not an issue that is unique to KodakCoin; lots of "utility tokens" intended to be used on not-yet-built blockchain platforms have the same problem. People who actually plan to build useful blockchain platforms have thought about it, and have come up with plausible solutions like the Simple Agreement for Future Tokens. But KodakCoin doesn't seem interested in those solutions: Its white paper (not publicly available online for some reason) just says that "Our own cryptocurrency payment platform will, subject to applicable securities laws, mean our photographers can get paid instantly." That is a big "subject to"! If it turns out that the securities laws are not a problem, then sure, photographers will be able to get paid in KodakCoins. If they are a problem -- as they seem to be -- then, you know, whatever, never mind. It is a weirdly casual approach to the legal viability of the token.