Crypto Company (CRCW) Risk Analysis

On December 19, 2017, the SEC, pursuant to Section 12(k) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), temporarily suspended trading of the Company's stock on the OTC Pink market until January 3, 2018 (the "Trade Halt"). The SEC cited concerns on the accuracy and adequacy of information in the marketplace about, among other things, the compensation paid for promotion of the Company, statements in SEC filings about the plans of the Company's insiders to sell their shares of the Company's common stock and potential manipulative transactions in the Company's stock in November of 2017. The Trade Halt was lifted by the SEC as of January 4, 2018, and the SEC did not provide comments on whether it is still investigating the Company. Although the Company has had ongoing communications with the SEC and we believe that we have addressed all of the issues raised by the SEC, we cannot guarantee that the SEC will not suspend the trading of the Company's stock on the OTC Markets, should we resume our quotation thereon, or on any national securities exchange in the future. Upon the expiration of the Trade Halt, the OTC Markets, automatically, as a matter of course, discontinued the display of quotes for our common stock and moved our common stock to the OTC Grey Market (the "Grey Market Listing") as of January 4, 2018. Securities listed on the OTC Grey Market are tradable, but broker-dealers of such securities are unable to publicly quote such securities. While the Company continues to work with the OTC Markets, there can be no guarantee that our stock will resume trading on the OTC Pink market.

Since the Grey Market Listing, there has not been any trading activity in our common stock on a national securities exchange, the OTC Pink market or any other OTC Market, and an active trading status on such OTC Markets or exchange for our shares may never develop or be sustained. Even if the Company's stock resumes trading on the OTC Pink Market, the Company can neither guarantee that the OTC Market will remove the Caveat Emptor designation assigned to the Company nor the SEC will not suspend or halt trading of the Company's stock in the future. As a result, investors in our common stock must bear the economic risk of holding those shares for an indefinite period of time. We do not now, and may not in the future, meet the listing standards of any national securities exchange. As a result, our stockholders may find it difficult to obtain an accurate determination as to the market value of their shares of our common stock, and may find few buyers to purchase their stock. As a result of these and other factors, it may not be possible to resell shares of our common stock at or above the price for which they were purchased, or at all. Further, an inactive market may also impair our ability to raise capital by selling additional equity in the future, and may impair our ability to enter into strategic partnerships or acquire companies or products by using shares of our common stock as consideration.

The holders of our shares of common stock and persons who desire to purchase them in any trading market that might develop in the future should be aware that there might be significant state law restrictions upon the ability of investors to resell our shares. Accordingly, even if we are successful in having the shares available for trading on the OTCQB marketplace or on the OTC Bulletin Board, investors should consider any secondary market for our common shares to be a limited one. We intend to seek coverage and publication of information regarding the company in an accepted publication, which permits a "manual exemption." This manual exemption permits a security to be distributed in a particular state without being registered if the company issuing the security has a listing for that security in a securities manual recognized by the state. However, it is not enough for the security to be listed in a recognized manual. The listing entry must contain (1) the names of issuers, officers, and directors, (2) an issuer's balance sheet, and (3) a profit and loss statement for either the fiscal year preceding the balance sheet or for the most recent fiscal year of operations. We may not be able to secure a listing containing all of this information. Furthermore, the manual exemption is a non-issuer exemption restricted to secondary trading transactions, making it unavailable for issuers selling newly issued securities. Most of the accepted manuals are those published in Standard and Poor's, Moody's Investor Service, Fitch's Investment Service, and Best's Insurance Reports, and many states expressly recognize these manuals. A smaller number of states declare that they "recognize securities manuals" but do not specify the recognized manuals. The following states do not have any provisions and therefore do not expressly recognize the manual exemption: Alabama, Georgia, Illinois, Kentucky, Louisiana, Montana, South Dakota, Tennessee, Vermont and Wisconsin. Accordingly, our common shares should be considered totally illiquid, which inhibits investors' ability to resell their shares.

Any future financing, merger or acquisition effected by us would result in the issuance of additional securities and the substantial dilution in the percentage of our common stock held by our then existing stockholders. Moreover, the common stock issued in any such merger or acquisition transaction may be valued on an arbitrary or non-arm's-length basis by our management, resulting in an additional reduction in the percentage of common stock held by our then existing stockholders. Our Board has the power to issue any or all of such authorized but unissued shares without stockholder approval. To the extent that additional shares of common stock are issued in connection with and following a business combination or otherwise, dilution to the interests of our stockholders will occur and the rights of the holders of common stock might be materially and adversely affected.

The SEC has adopted regulations which generally define so-called "penny stocks" to be an equity security that has a market price less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exemptions. Our common stock initially was a "penny stock," and we became subject to Rule 15g-9 under the Exchange Act, or the "Penny Stock Rule." This rule imposes additional sales practice requirements on broker-dealers that sell such securities to persons other than established customers. For transactions covered by Rule 15g-9, a broker-dealer must make a special suitability determination for the investor and have received the investor's written consent to the transaction prior to sale. As a result, this rule may affect the ability of broker-dealers to sell our common shares and may affect the ability of investor s to sell any of our common shares in the secondary market. For any transaction involving a penny stock, unless exempt, the rules require delivery, prior to any transaction in a penny stock, of a disclosure schedule prepared by the SEC relating to the penny stock market. Disclosure is also required to be made about sales commissions payable to both the broker-dealer and the registered representative and current quotations for the securities. Finally, monthly statements are required to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stock. We do not anticipate that our common stock will qualify for exemption from the Penny Stock Rule. In any event, even if our common stock were exempt from the Penny Stock Rule, we would remain subject to Section 15(b)(6) of the Exchange Act, which gives the SEC the authority to restrict any person from participating in a distribution of penny stock, if the SEC finds that such a restriction would be in the public interest.

Rule 144 promulgated under the Securities Act ("Rule 144"), which provides for an exemption from the registration requirements under the Securities Act under certain conditions, requires, among other conditions, for resales of securities acquired in a non-public offering without having to satisfy such registration requirements, a six-month holding period following acquisition of and payment in full for such securities. There can be no assurance that the Company will fulfill any reporting requirements in the future under the Exchange Act or disseminate to the public any current financial or other information concerning the Company, as is required by Rule 144 as part of the conditions of its availability. Accordingly, an investor should be prepared to hold the securities acquired in such offerings indefinitely and cannot expect to be able to liquidate any or all of their investment even in case of an emergency. In addition, any proposed transfer must comply with restrictions on transfer imposed by the Company and by federal and state securities laws. The Company may permit the transfer of such securities out of a subscriber's name only when his or her request for transfer is accompanied by an opinion of counsel reasonably satisfactory to the Company that neither the sale nor the proposed transfer results in a violation of the Securities Act or any applicable state securities or "blue sky" laws.

Some, but not all, of our outstanding common shares may currently be eligible for resale under Rule 144 assuming we satisfy the requirements therein, including the requirements relating to the disclosure of current public information. If substantial amounts of our common stock become available for resale under Rule 144, prevailing market prices for our common stock will be reduced.