Topic: What do governments class as securities? (Read 71 times)
It was about the time they did something about these countless worthless ICOs. You can't just raise money and do nothing in return. You have to have a real project, a short term/long term plan. Otherwise it's plain and simple fraud.
recent SEC statement clearly indicate they are supporting the technology and innovation of cryptocurrencies we can see more positive statement coming from US authorities
So there is allot up in the air at the moment regarding what is and what isn't a security. But from a governments perspective it is quite simple and if we agree with it or not we still need to take notice.
You have probably been hearing the term "Howey" test. As primitive as this test is, this is what allot of top lawyers and government use to run classifications. It goes like this and if you display the following characteristics you are classed as a security.
THE HOWEY TEST 1946
1) The investment of money in a common enterprise
2) It is an investment of money
3) There is an expectation of profit
4) Any profit comes from a 3rd party or promoter
Unfortunately a hell of allot of protocols will fall into this basket. So it will be interesting to see how this develops. One interesting project being developed is the SAFT (simple agreement on future token sales) framework. This is still in its infancy and needs some ironing out but its basically says that accredited investors can invest in the protocol initially as a security and once the project goes live they can exchange the initial tokens for the promised utility token. It is worth looking into as it developed but it is still a flawed system but has the potential to be a vital tool moving forward.
You have probably been hearing the term "Howey" test. As primitive as this test is, this is what allot of top lawyers and government use to run classifications. It goes like this and if you display the following characteristics you are classed as a security.
THE HOWEY TEST 1946
1) The investment of money in a common enterprise
2) It is an investment of money
3) There is an expectation of profit
4) Any profit comes from a 3rd party or promoter
Unfortunately a hell of allot of protocols will fall into this basket. So it will be interesting to see how this develops. One interesting project being developed is the SAFT (simple agreement on future token sales) framework. This is still in its infancy and needs some ironing out but its basically says that accredited investors can invest in the protocol initially as a security and once the project goes live they can exchange the initial tokens for the promised utility token. It is worth looking into as it developed but it is still a flawed system but has the potential to be a vital tool moving forward.
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