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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

#161

Post by dcow »

wpietri wrote: post #111
Animats wrote: post #107

NFTs 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-m…

I really appreciate the way the Howey Test matches the regulatory purpose, its operationalist approach to the question. That it's stood up to nearly a century of scammer "innovation" is admirable. It does have the drawback of requiring some interpretation, some thought. But I think that's necessary. Rather than requiring regulators to keep creating ever-broader definitions of "security", patching every scammer hole,…

Not trying to kill the vibe of your comment, I just want to point out that the burden of proof historically has fallen on the accuser, the regulator, the plaintiff, (point is: not the defendant,) to prove that some behavior is illegal and problematic. So I’m not sure I agree that it’s good to foster a regulatory regime where everyone trying to innovate is questioning whether the political winds will change in the future and some new hotshot regulator is going to make their career by being tough on whatever they’re currently doing when last year nobody cared. Post facto regulation doesn't really do any good as you’ve realized in your comment—the damage is already done.

So at least I think we need to protect innovators by holding regulators to a statute of limitation on enforcing policy (like no bringing cases against activity that predates some signaling by the regulator that the interpretation is changing), and ideally require regulators to publish guidelines before they’re allowed to take legal action. Or maybe regulators should have to inform an innovator that they’re no longer in compliance with an updated perspective and provide them actionable steps that if taken would make them compliant, etc. prior to taking legal action.

I’m not saying there’s no room for interpretation practically, but this deal where the SEC sits silent on whether “crypto assets” are securities or not and the only way we’ll know is if they sue one of the innovators doesn’t seem particularly healthy either. It’s exactly why you can’t be held criminally accountable for something you did before it became a crime, and we should hold regulators to the same expectations.

Re: SEC charges Impact Theory for unregistered offering of NFTs

#162

Post by justin101 »

Not being from the US, this is probably a stupid question. But why can't people in the US sell willingly and freely sell things (legitimate or otherwise) to other willing buyers without government interference/participation?

I guess I used to think the US was the "land of the free" I guess I understood that people used this phrase in a literal way. Im wondering, when American's use the phrase "land of the free" perhaps I am misunderstanding, and it's really generally used in an ironic way?

Can someone please explain?

Re: SEC charges Impact Theory for unregistered offering of NFTs

#163

Post by [deleted] »

justin101 wrote: post #162

Not being from the US, this is probably a stupid question. But why can't people in the US sell willingly and freely sell things (legitimate or otherwise) to other willing buyers without government interference/participation? I guess I used to think the US was the "land of the free" I guess I understood that people used this phrase in a literal way. Im wondering, when American's use the phrase "land of the free" perha…

[deleted]

Re: SEC charges Impact Theory for unregistered offering of NFTs

#164

Post by nativeit »

starttoaster wrote: post #93
gmerc wrote: post #46

Earlier quoted context omitted.

It’s a completely made up problem for which crypto is supposedly the solution - We’ve known for 2 decades how to do skin or items exchange between games. It involves relational databases. Valve does it for their games or at least could do it at will. There’s not one unsolved technical problem here - There is zero incentive for developers, publishers and licensors (you know the people that make up the game industry) t…

I'm not even a crypto bro, but it's honestly more exhausting to listen to someone go on about how private backends with user facing storefronts and relational databases solve the same problems as blockchain, than it is to listen to a crypto bro explain why we can't trust companies to manage records in their own relational database.

Just wanted to point out that one of these things necessarily follows the other, and billions have been wasted by people who listened to the cryptocurrency advocates, but failed to heed the warnings offered within those hyper-verbose responses.

There’s a well-established effect, common enough at this point to where some academic has probably given it a name like “The Twitter Dilemma” or something, that describes how a lie can be much more potent and contagious with exponentially fewer words than are necessary to effectively refute it.

You should feel free to ignore the extended retorts if you find them tiresome, but the modern reality is that you will be more likely to fall victim to a huckster’s scheme as a result. In the immortal words of Matt Damon, “Fortune favors the incurious, who like them apples.”

Re: SEC charges Impact Theory for unregistered offering of NFTs

#165

Post by smachiz »

chrisco255 wrote: post #151
Animats wrote: post #107

NFTs 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-m…

> if it is marketed, bought, sold, and held as a money-making thing, it's a security No, sorry, no such legal language exists and how absurd of a law would that be. Anything which goes up and down in value could be bought or sold as "a money making thing" including collectible video games, books, Pokemon cards, .com domain names, pork bellies, houses, bar codes, imported goods, rare sneakers, wholesale products, golf…

They were tryiny to thread a needle between a security and a commodity that acts like either, but is regulated like neither.

Which is a great indicator it's a scam.

Re: SEC charges Impact Theory for unregistered offering of NFTs

#166

Post by CryptoBanker »

_trampeltier wrote: post #160

Some people argue with baseball, pokemon or whatever cards. I mean they have at least more or less a real usecase. But how about rare sneakers? The are really just for collecting and trading.

Wait, what’s the real usecase for baseball cards beyond collecting and reading? Asking as a baseball fan

Re: SEC charges Impact Theory for unregistered offering of NFTs

#167

Post by IOT_Apprentice »

justin101 wrote: post #162

Not being from the US, this is probably a stupid question. But why can't people in the US sell willingly and freely sell things (legitimate or otherwise) to other willing buyers without government interference/participation? I guess I used to think the US was the "land of the free" I guess I understood that people used this phrase in a literal way. Im wondering, when American's use the phrase "land of the free" perha…

Well first there are taxes. Secondly some things like narcotics are not alllowed to be sold. Other controlled substances as well.

Re: SEC charges Impact Theory for unregistered offering of NFTs

#168

Post by freeone3000 »

ivalm wrote: post #136
psychlops wrote: post #128

Earlier quoted context omitted.

> if it is marketed, bought, sold, and held as a money-making thing, it's a security. At face value that definition would, of course, include commodities and futures, which it doesn't. There must be more to the definition.

OP is missing “common enterprise” part of definition, which covers commodities. Security futures are securities (jointly managed by SEC and CFTC), commodity futures are not (as they are a derivative on a non-security). The main inconsistency is that bank loans are not securities.

Bank loan derivatives and packaged loan products are, however. It is simple debt sales that are not, which is reasonable.

Re: SEC charges Impact Theory for unregistered offering of NFTs

#169

Post by TylerE »

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?…

People hate fees.

Buying an NFT MTX is not just a fee, not just a fee fee, but like a fee fee fee.

Re: SEC charges Impact Theory for unregistered offering of NFTs

#170

Post by nativeit »

duskwuff wrote: post #122
delecti wrote: post #102

Earlier quoted context omitted.

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.

Or, to put it in terms of the Howey test: eating lunch is not a common enterprise , and not dying of hunger is not an expectation of profit .

> …and not dying of hunger is not an expectation of profit. Presently, although with maybe another couple decades at our current clip, we’ll all live to see a world where our great-grandkids will all be employed to Elon Musk’s preserved head in a jar—mining minerals on Mars in exchange for bunkbeds in the old mineshaft and a handshake promise you won’t dye of hunger. The pension plan is an opportunity to purchase “Vitality Coins” pre-tax that can be exchanged for MeatX[TM] rations at the company store until you ultimately perish from everything else killing you in the Martian environment.
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