Source: https://www.linkedin.com/feed/update/urn%3Ali%3Ashare%3A7073300345635966976
Crypto Frenzy Rife with ‘Hucksters, Fraudsters, Scam Artists’ – U.S. Securities and Exchange Commission Chair Gary Gensler: https://lnkd.in/guTfNF_C : Current crypto frenzy is “reminiscent of 1920s before the federal securities laws… #Hucksters. #Fraudsters. #Scam artists. #Ponzi schemes.”
#Satoshi #Nakamoto’s #Bitcoin #Paper https://lnkd.in/ePsDYDK spurred development of #crypto #assets and underlying #blockchain #ledger technology.
“However, of the #ledger being used, be it a #spreadsheet, a #database, or #blockchain technology, when #investors put their #money at #risk, it’s the #economic #realities of the #investment that matter. Thus, #crypto #security issuers need to register the #offer and #sale of their #investment #contracts with the #SEC… We’ve had #rules governing how issuers must do that with years of guidance to market participants on what does or does not constitute a #crypto #asset #security…”
Framework for “Investment Contract” Analysis of Digital Assets
https://lnkd.in/gs8yK-hX
‘If you are considering an #ICO or engaging in the #offer, #sale, or #distribution of a digital asset, you need to consider whether the U.S. #federal #securities #laws apply. A threshold issue is whether the digital asset is a “#security” under those laws. The term “#security” includes an “#investment #contract,” as well as other #instruments such as #stocks, #bonds… A digital asset should be analyzed to determine whether it has the characteristics of any product that meets the definition of “security” under the federal securities laws. In this guidance, we provide a framework for analyzing whether a digital asset has the characteristics of one particular type of security – an “investment contract.” Both the Commission and the federal courts frequently use the “investment contract” analysis to determine whether unique or novel instruments or arrangements, such as digital assets, are securities…’
When #crypto #asset #market participants go on #Twitter or #TV and say they lacked “fair notice” that their conduct could be illegal, don’t believe it. They may have made a calculated #economic #decision to take the #risk of #enforcement as the cost of doing business. Some promoters of crypto asset securities contend that their token has a function beyond simply being an investment vehicle… Some additional utility does not remove a crypto asset security from the definition of an investment contract as in #Howey #decision, the #SupremeCourt wrote that, if the #investment #contract #test is satisfied, “it is immaterial whether the enterprise is speculative or nonspeculative, or whether there is a sale of property with or without #intrinsic #value.”
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