Regulatory Posture

1. Current status

TokenCap Advisors LLC is an independent advisory firm. TCA is not currently registered with the Securities and Exchange Commission (SEC) as an investment adviser, and is not a broker-dealer or member of FINRA.

TCA operates in a manner consistent with its business model (described in Section 3 below) that has been structured, with the advice of counsel, so that the services offered do not require current registration as an investment adviser under the Investment Advisers Act of 1940.

2. Why we voluntarily adhere to § 275.204-2

Although TCA is not currently required to comply with 17 C.F.R. § 275.204-2 (the SEC recordkeeping rule for registered investment advisers), we voluntarily adopt recordkeeping practices modeled on that standard.

The rationale is straightforward:

• Integrity of the analytical record. The same disciplines that make recordkeeping meaningful to a regulator make our analytical outputs defensible and reproducible for clients, counterparties, and examiners.
• Forward readiness. If and when TCA registers as an investment adviser, our records and practices should already meet the applicable standard. We prefer structural readiness to remediation.
• Client trust. Counterparties evaluating TCA’s work can take comfort that our records are maintained under a recognized standard, not a bespoke internal policy.

Specifically, TCA retains analytical records for a minimum of five years, maintains an immutable audit log with cryptographic chaining, applies documented role-based access controls, and enforces function separation between research, scoring, and compliance functions.

3. The 2678 business model

TCA’s services are structured to be informational and analytical in nature, not transactional or discretionary. Specifically:

• TCA does not have custody of client assets
• TCA does not execute transactions on behalf of clients
• TCA does not provide discretionary portfolio management
• TCA does not offer securities; the Viability Opinion Reports, risk assessments, and related analytical deliverables are research products, not securities
• TCA services are offered exclusively to accredited persons and registered project sponsors as applicable

This structuring is consistent with the analysis in SEC v. W. J. Howey Co., 328 U.S. 293 (1946) and subsequent case law addressing what constitutes an “investment contract” under Section 2(a)(1) of the Securities Act of 1933. TCA’s deliverables represent professional analytical services, not investment contracts.

4. Forward plan

TCA intends to evaluate registration as an investment adviser as business needs evolve. Specific timing for registration has not been determined and is dependent on factors including service scope, client base, and applicable regulatory thresholds.

If and when TCA registers, this page will be updated with current registration status, applicable CRD number, Form ADV reference, and any additional disclosures required under the Advisers Act.

5. Not legal or tax advice

Nothing on this page constitutes legal or tax advice. Users and prospective clients should consult their own qualified counsel regarding the regulatory implications of any TCA engagement for their specific situation.

6. Regulatory correspondence

Regulatory correspondence, examination requests, or related inquiries can be directed to inquiries@tokencapadvisors.com with subject prefix “Compliance” or “Regulatory” for priority routing.