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SEC charges Impact Theory for unregistered offering of NFTs

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Re: SEC charges Impact Theory for unregistered offering of NFTs

#61

Post by somenameforme »

RC_ITR wrote: post #18
jermaustin1 wrote: post #7

The concept of NFTs stored on a distributed ledger makes sense to me especially for the shitty games that sell skins. The idea they have some sort of value and can be considered a security, doesn't really. It is no different than the current in-game marketplaces that sell/resell skins from whatever game has skins this week. At what point does a thing you buy or sell become a security? Are baseball cards a security? S…

This comes back to the core problem of crypto though - I agree that transferring skins would be cool or whatever, but distributed consensus does almost nothing to accomplish that. A game developer already has to opt-in to the NFT system and then maintain indefinite support for the NFT system, so if you trust them to do that why don’t you also trust them to maintain the ownership ledger?

It depends on exactly how the system is decentralized, but let's imagine that the tokens contain sufficient information to generate the e.g. skins. And now imagine some company decides to stop supporting this group of tokens, or perhaps goes bankrupt. In a centralized system that's the end, but in a decentralized one another company is now free to take advantage of that gap in the market and offer to support those tokens.

There's some pretty neat possibilities here, but they'll take a while to emerge. Not only is there no immediate profit motive (for a company on the complete up and up) but there's an active anti-profit motive since you're voluntarily ceasing otherwise profitable/powerful control for ideological gains.

Re: SEC charges Impact Theory for unregistered offering of NFTs

#62

Post by jkingsman »

bigbillheck wrote: post #42
jkingsman wrote: post #37

Earlier quoted context omitted.

If crypto was actually like lunch -- returns were generated in minutes, there were tens of millions of successful examples that don't fail, and the insanely rare ones that fail in that mode risk double or low triple digit dollars -- then maybe the SEC wouldn't care as much.

When lunches fail it's more often the CDC (or the local equivalent) that gets involved.

HAH right XD

Re: SEC charges Impact Theory for unregistered offering of NFTs

#63

Post by jkingsman »

_jal wrote: post #49
playday wrote: post #35

When you buy a restaurant lunch, you are expecting to increase your work income via the efforts of the cooks. And you clearly invested money since you pay for the lunch before you ate it. That’s all 3 prongs if the Howey test. Why isn’t the SEC enforcing securities laws against lunch fraud? Lunches must publish their financial statements so lunch buyers can make informed decisions! Personally I am angry that restaura…

There should be a version of Nomic[1] specific to the sort of fantasy legal interpretation popular with NFT-enthusiasts, tax protestors, sovereign citizens, and other idiosyncratically motivated amateur legal practitioners. [1] https://en.wikipedia.org/wiki/Nomic

Indeed, I think this is actually a tricky issue, especially for technically-minded people. I, too, fell into the trap of thinking of the legal system as not a system of guidelines for human interaction, but instead an airtight system of interlocked regulations. Exploiting loopholes or finding odd emergent behavior was a feature and not a bug. It took some maturing for me to realize that law serves the people, not the other way around, and that hyper-compliance with the law such that your "legal" actions generate unexpected/unintended effects just collapse when they meet with the legal /system/, which is just people.

Re: SEC charges Impact Theory for unregistered offering of NFTs

#64

Post by zztop44 »

DonHopkins wrote: post #53
ramijames wrote: post #31

Earlier quoted context omitted.

That's exactly what we've been trying to build at Ultra.io The push back from gamers has been non-stop and intense. I don't get it. They are willing to buy digital assets which can't be resold on an open market. They are not willing to buy digital assets that can. It's kind of bonkers.

And how about the push-back from game developers who don't want to spend the extra incredible amount of work they would have to invest to enable importing digital assets from other games to unbalance and pollute their own games and cut into their revenue? If you were an actual game developer yourself, this would be obvious to you. >The push back from gamers has been non-stop and intense. I don't get it. It's quite ob…

I don’t have a horse in this race and I’m not a gamer (although I used to be) and I also find it strange that gamers don’t prefer NFTs over the standard skins/cosmetics market. I can totally understand why developers and publishers prefer to keep digital assets in their own databases, but from a users perspective having it on a public blockchain seems like exactly the same product but better in terms of more options?

I could understand if the aversion was around the impacts of monetising play on the culture, but many of these games already have high volume third party resale markets for digital assets so I feel like that shit has sailed?

For what it’s worth, I have watched Line Goes Up and thought it was a good and fair analysis of the NFT market.

Re: SEC charges Impact Theory for unregistered offering of NFTs

#65

Post by DonHopkins »

zztop44 wrote: post #64
DonHopkins wrote: post #53

Earlier quoted context omitted.

And how about the push-back from game developers who don't want to spend the extra incredible amount of work they would have to invest to enable importing digital assets from other games to unbalance and pollute their own games and cut into their revenue? If you were an actual game developer yourself, this would be obvious to you. >The push back from gamers has been non-stop and intense. I don't get it. It's quite ob…

I don’t have a horse in this race and I’m not a gamer (although I used to be) and I also find it strange that gamers don’t prefer NFTs over the standard skins/cosmetics market. I can totally understand why developers and publishers prefer to keep digital assets in their own databases, but from a users perspective having it on a public blockchain seems like exactly the same product but better in terms of more options?…

> from a users perspective having it on a public blockchain seems like exactly the same product but better in terms of more options

What options? What advantages are there? Better for who, the scammers pulling the rug?

Keep in mind, the oft-repeated promise of being able to move assets from one game to another is a bald faced lie, and that's pretty obvious to developers and even players, just not crypto bros and NFT shills who have never developed or played games, apparently.

Re: SEC charges Impact Theory for unregistered offering of NFTs

#66

Post by lukev »

alasdair_ wrote: post #60
lukev wrote: post #24

Earlier quoted context omitted.

But if it's not a security, is it fraud? If I sell you a hand drawn stick figure for $100, and you buy it because it's "art", then there's no rug to pull. You bought it, and it doesn't matter to the artist whether the resale value goes up or down. If it goes down, it's still not fraud. But if I sell you a hand drawn stick figure for $100, and you buy it with the mutual expectation that it will eventually be worth mor…

>But if I sell you a hand drawn stick figure for $100, and you buy it with the mutual expectation that it will eventually be worth more because of the value of the brand/project, and the effort I put in to grow that value... isn't that a security, by definition? This seems equivalent to buying a baseball card of a specific player with the expectation that the player will put in effort into the game and thus increase…

It's really not equivalent. The player does not issue the card.

Re: SEC charges Impact Theory for unregistered offering of NFTs

#67

Post by [deleted] »

alasdair_ wrote: post #60
lukev wrote: post #24

Earlier quoted context omitted.

But if it's not a security, is it fraud? If I sell you a hand drawn stick figure for $100, and you buy it because it's "art", then there's no rug to pull. You bought it, and it doesn't matter to the artist whether the resale value goes up or down. If it goes down, it's still not fraud. But if I sell you a hand drawn stick figure for $100, and you buy it with the mutual expectation that it will eventually be worth mor…

>But if I sell you a hand drawn stick figure for $100, and you buy it with the mutual expectation that it will eventually be worth more because of the value of the brand/project, and the effort I put in to grow that value... isn't that a security, by definition? This seems equivalent to buying a baseball card of a specific player with the expectation that the player will put in effort into the game and thus increase…

[deleted]

Re: SEC charges Impact Theory for unregistered offering of NFTs

#68

Post by vikramkr »

junofan wrote: post #32
evilantnie wrote: post #20

Earlier quoted context omitted.

From what I'm reading here, the company misled "investors" by attaching the NFT to ownership in the company, which would be considered a security. "The order finds that Impact Theory encouraged potential investors to view the purchase of a Founder’s Key as an investment into the business, stating that investors would profit from their purchases if Impact Theory was successful in its efforts." When I purchase a baseba…

You must not be buying baseball cards in 2023. It’s gotten crazy.

That's still just the value of what the collectors market will pay. You down own a share in MLB with the card

Re: SEC charges Impact Theory for unregistered offering of NFTs

#69

Post by acdha »

edent wrote: post #47
ramijames wrote: post #31

Earlier quoted context omitted.

That's exactly what we've been trying to build at Ultra.io The push back from gamers has been non-stop and intense. I don't get it. They are willing to buy digital assets which can't be resold on an open market. They are not willing to buy digital assets that can. It's kind of bonkers.

Because there's no guarantee that those assets will be respected. At any point the game maker can say "V1 assets aren't supported in V2". Or they can flood the market with "rare" items. Or they'll buy an item which was "stolen" and have it unilaterally revoked. Or... the list goes on. There's also zero possibility of cross-game use. If ID releases the BFG9000 for free, is Skyrim going to let you shoot that at dragons…

Just to expand on your last point, I read their ad copy and once you strip out all of the meaningless filler text you have this key quote: “with the permission of the developer”. If they weren’t going to do it before, this can’t force them and if they were, they don’t need it.

As a game buyer, that sounds like doubling the number of companies who need to be paid and whose business decisions or failure will break things, add additional fees, etc. “Our incredible journey” is another way to say “you’re going to get server errors if you try to use your purchases”.

As a game developer, that sounds like I still have to do almost all of the work but now I’m locking in payments and giving up some control of my business to another party whose interests only partially correlate with mine or my partner developers’.

In both cases, there doesn’t seem to be enough value to support a sustainable business. Any two game developers are going to need to collaborate to share anything between games, and there’s a really upper bound on how much money they’ll pay before cutting out the middleman starts to look really compelling. Similarly, many gamers don’t like pay to win and won’t pay anything for cosmetic items so you’re chasing the percentage of people who both do and are willing to pay more upfront and more later despite not even knowing what future games would offer that option or how much they’ll charge.

Re: SEC charges Impact Theory for unregistered offering of NFTs

#70

Post by RC_ITR »

somenameforme wrote: post #61
RC_ITR wrote: post #18

Earlier quoted context omitted.

This comes back to the core problem of crypto though - I agree that transferring skins would be cool or whatever, but distributed consensus does almost nothing to accomplish that. A game developer already has to opt-in to the NFT system and then maintain indefinite support for the NFT system, so if you trust them to do that why don’t you also trust them to maintain the ownership ledger?

It depends on exactly how the system is decentralized, but let's imagine that the tokens contain sufficient information to generate the e.g. skins. And now imagine some company decides to stop supporting this group of tokens, or perhaps goes bankrupt. In a centralized system that's the end, but in a decentralized one another company is now free to take advantage of that gap in the market and offer to support those to…

> In a centralized system that's the end, but in a decentralized one another company is now free to take advantage of that gap in the market and offer to support those tokens.

You’re saying the new company makes a new game to support the skins?

Other than “making those skins be worth money,” why do we need to spend so much effort on proof of ownership then? Couldn’t the new developer just make those skins available for free and improve everyone’s lives?

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