NFT was just all fake volume... Sell an NFT to yourself for $1m, boom, you now own a $1m asset. Then list it for $100k for the next sucker.
SEC charges Impact Theory for unregistered offering of NFTs
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Re: SEC charges Impact Theory for unregistered offering of NFTs
#102When 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…
Even under your ludicrous example, lunch is not an investment because the increase in income does not come from reselling the lunch. At the absolute most, if you really squint and stretch, you could argue that lunch is a business expense.
Re: SEC charges Impact Theory for unregistered offering of NFTs
#103Earlier quoted context omitted.
Wouldn't the inverse be true - baseball cards become much more rare if Baseball itself ceases to exist as a going concern.
Yes, baseball cards would become incredibly valuable (at least the rare ones).
This only would be the case if people continued to care about baseball. In reality, fewer people would care less and less over time. For example, there is not great value in jousting paraphenelia.
Re: SEC charges Impact Theory for unregistered offering of NFTs
#104Earlier quoted context omitted.
>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…
The player does not issue the card. The player does not profit from any "appreciation" of the cards. The amount of player cards sold is nowhere near that of NFTs so the potential damage is limited and the history of player cards has always been for "collector" value and not a real investment. The history of NFTs has been since day one for Investment.
> The history of NFTs has been since day one for Investment.
I'd argue that there was a brief moment -- right at the start, when NFTs were a novelty and most of the ones being minted were one-offs which purportedly represented unique things created independently from the NFT, like a YouTube video or a tweet or a piece of art -- where one could conceivably argue that NFTs could be collector's items and not investments.
The moment that groups like Larva Labs started minting runs of thousands of NFTs with images stamped out from a template, though, that argument became much harder to support. Nowadays, it's thoroughly dead.
Re: SEC charges Impact Theory for unregistered offering of NFTs
#105Earlier quoted context omitted.
I agree that the dissenters bring up a lot of good questions that need answering. However, if you believe their fundamental argument that NFTs aren't really securities... what regulatory body should prevent this kind of behavior? Or should rug-pulls effectively be legal, and buyer beware?
If NFTs are not securities, then I believe it would fall on the FTC, like most other consumer protections.
How do NFTs fail to meet the Howey Test?
Re: SEC charges Impact Theory for unregistered offering of NFTs
#106When 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…
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.
It may seem like lunches are doing well for a little while, but 12 hours later, they all go to shit
Re: SEC charges Impact Theory for unregistered offering of NFTs
#107NFTs were supposed to be an end-run around the Howey Test. ICOs were clearly securities offerings, and the SEC shut down most of those. NFTs were specifically designed to evade that test, by claiming they were really "digital artworks". This one, though, was clearly marketed as Make Money Fast. The Securities Act of 1934 has a "duck test" definition of security - if it is marketed, bought, sold, and held as a money-making thing, it's a security. The contract terms don't matter. This is because creative financial scams long predate 1934.
Re: SEC charges Impact Theory for unregistered offering of NFTs
#108what Impact Theory is this ? the youtube channel ?
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Re: SEC charges Impact Theory for unregistered offering of NFTs
#109NFT was just all fake volume... Sell an NFT to yourself for $1m, boom, you now own a $1m asset. Then list it for $100k for the next sucker.
How do you sell yourself a NFT to yourself if you don't already have $1,000,000? Something is clearly missing from your line of thinking here.
Re: SEC charges Impact Theory for unregistered offering of NFTs
#110Earlier quoted context omitted.
You must not be buying baseball cards in 2023. It’s gotten crazy.
Does buying a baseball card in 2023 now entail ownership in Fanatics or Panini? If not, then it's not even remotely the same thing as what goes on with non-fungible tokens like the one here.
I don’t think these NFTs give ownership rights either. Reading the SEC order, it sounds like the reasonable expectation of a profit was the issue.