221–230 of 257 posts
I really enjoy a lot of Tom Bilyeu's content, but I've noticed he seems to lack a filter for great ideas from charlatans. And in some regards fair enough, it can be hard, but he's also building a brand and company around some folks who seem to be exaggerating their claims. For example Raoul Pal.
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That seems to reinforce the grandparents characterization of this as an evasion of the Howey test, not refute it. You really think the technical distinction of a unique number defeats the idea of "common enterprise"? Doesn't the fact that all the initial profit goes to one enterprise clearly make it "common"? Conversely, aren't traded shares of common stocks on NYSE merely "speculative flipping" unless they're specif…
> Doesn't the fact that all the initial profit goes to one enterprise clearly make it "common"? Maybe, but you're not tied to the enterprise after the initial purchase. > Conversely, aren't traded shares of common stocks on NYSE merely "speculative flipping" unless they're specifically paying dividends? The value is tied to the company and can be extracted in a multitude of ways, and the company has a duty to the sha…
Which is to say, again, that it's complicated and there aren't any free hacks to evade regulation if you're trying to scam people with an obviously fraudulent security
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If not for the show, the cards wouldn’t be worth as much. The show is what is spreading the memes and driving the demand for show related merchandise. That IS the business model! It sounds like your whole defense would hinge on hoping the SEC won’t be able to convince a court that it’s a common enterprise. I looked it up and “common enterprise” is not very well defined in either statutory law nor case law. I have bee…
> The show is what is spreading the memes and driving the demand for show related merchandise. That IS the business model! I'm actually not sure how true this is. Given that there are non-pokemon examples (like magic: the gathering) that don't have cross-branding, and there exists a competitive pokemon TCG scene independent of the show, and the cards maintain a secondary market value as long as people want to play ki…
This was the dangerous precedent set in their victory over LBRY in December 2022. They argued that if at least some people bought the utility tokens with expectation of profit, then the utility token sales were securities -- and the judge bought it!
https://www.ropesgray.com/en/newsroom/alerts/2022/december/s...
LBRY's arguments sound like yours: LBRY argued in support of its motion for summary judgment that LBC coins are not securities because (1) they are consumptive in nature, with purchasers using LBC for on-chain activities rather than investment purposes; (2) the “primary focus” of LBRY’s promotional statements and materials was the utility of LBC, not its potential price appreciation; and (3) LBRY stated explicitly in marketing materials that LBC was intended for consumption on the LBRY network, not as an investment.
The court also rejected LBRY’s argument that the purchase of LBC for consumptive, and not speculative, use by some of its buyers suggests that LBC is not a security for any of its buyers. The court suggested that the intended use of the token by a subset of LBC purchasers was of limited relevance to the overall analysis, which ultimately indicated that LBC was a security under the Securities Act.10
https://www.cooley.com/news/insight/2022/2022-12-01-another-...
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The good news is that judges can read the law and interpret it without having a myopic focus on specific wordings. They also don't use investopedia as a legally-binding source. Whether an NFT (or any other crypto token) is a security is still very much up in the air, and I am assuming is not able to be uniformly defined. People making noises like "you are investing in a project" and "there will be airdrops to NFT hol…
People are trying to over-complicate this even though the lines are clear. The intent is here what matters regardless of the implementation. Are you selling a "future expected outcome" or are you selling an art piece (or whatever other junk) with no strings attached. Of course, selling the art piece without a proposition to an increase in value will not attract "investors". > Even tokens like ETH or BTC could be cons…
That is likely why the SEC chairman doesn't want to comment on them.
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People are trying to over-complicate this even though the lines are clear. The intent is here what matters regardless of the implementation. Are you selling a "future expected outcome" or are you selling an art piece (or whatever other junk) with no strings attached. Of course, selling the art piece without a proposition to an increase in value will not attract "investors". > Even tokens like ETH or BTC could be cons…
From what I've understood, the CFTC and the SEC have decided between them that the CFTC will worry specifically about BTC and ETH (and a few other coins that can reasonably be considered commodities), and the SEC will worry about the rest. That is likely why the SEC chairman doesn't want to comment on them.
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Why do I even bother to reiterate the rest of the paragraph that you did not quote? Game developers and their users are regularly exploited by App Store and payment processor fees. Transfers of ERC721 and ERC20 on an L2 is negligible by comparison: https://l2fees.info/
Apple, Google etc aren't going to allow you to bypass their in-app purchasing system. Has been tried many times before and just results in your app being banned.
But the more obvious solution here is to not use the walled garden app stores at all, if you plan to monetize and distribute assets via crypto. Thankfully we do have the web and PWAs.
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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.
You ever go buy a shirt and have the counter guy ask you if you’d like to register the shirt in a marketplace? I don’t want to think of my shirt as a sellable asset.
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> But would it really have hurt to have the SEC say “we’ll be applying the Howey Test to NFTs, if you plan to sell one we’d recommend consulting a lawyer versed in securities law before proceeding”. They did that a few years back for ICOs, sending out "You seem to be doing an ICO. Tell us why you don't need to register this as a security". The ICO market mostly evaporated. A few ICOs did a securities registration. Em…
Got a link to the registration form? Would like to learn more.
Form D, for small (under $5 million) issuers with a limited number of stockholders.[2] Free to file. Useful for legit small businesses, but not so much for crypto, because crypto issuers want a big "market cap" and lots of HODLrs.
Form S-1, for large issuers.[3] This is the classic paper form as a PDF, but today you file this as an XML document. Software to format the XML file is available from several companies. Anyone can download those files and analyze them, plus, at last, the SEC web site has a decent web search interface that displays the financial info. Filing fee is $110.20 per $1,000,000 raised.
Misstatements on a form S-1 are felonies. One of the main reasons crypto bros hate this process.
[1] https://www.sec.gov/news/press-release/2017-227
[2] https://www.sec.gov/education/smallbusiness/exemptofferings/...
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> The show is what is spreading the memes and driving the demand for show related merchandise. That IS the business model! I'm actually not sure how true this is. Given that there are non-pokemon examples (like magic: the gathering) that don't have cross-branding, and there exists a competitive pokemon TCG scene independent of the show, and the cards maintain a secondary market value as long as people want to play ki…
Sorry but it's not about what you do. Even if it fails prong 2 and 3 for you , the SEC can still successfully argue that the vast majority of sales are securities. This was the dangerous precedent set in their victory over LBRY in December 2022. They argued that if at least some people bought the utility tokens with expectation of profit, then the utility token sales were securities -- and the judge bought it! https:…
Konami stock goes the more blue-eyes white dragons are printed. That isn't true for LBRY, and that's what the "common enterprise" bit is about. Hasbro and Konami and the Pokemon company aren't keeping a stockpile of additional secret super valuable cards to go up in value over time, because they aren't securities and they don't act like securities, and the companies will just print more of them if they want to. But that isn't true for LBRY when they keep a hold of the asset they create and bet on its value increasing over time!
And of course this is why we have judges. They can look at the evidence and see that The vast majority of LBRY investors were investing with a profit expectation, LBRY was treating the token as an investment that people could use to profit from the platform's success, etc. The difference is that with LBRY, people treating it as a security was the norm, but with TCGs, treating it as a security is done only by exceptional investors, and the companies don't condone it, even tacitly[0]. And the actual filings in the case make that abundantly clear. You don't have the CEO of Hasbro or Konami or The Pokemon Company releasing press releases about the market value of cards.
Like in the past I'd seen some of these arguments and been somewhat convinced (especially around the whole secondary-market and tax issues), but this feels really cut and dry.
[0]: (except perhaps with MTG's reserved list, but that still fails due to condition 2 above, Hasbro/Wizards and the "investors" in the Reserved list cards have different interests. They aren't invested in a common enterprise. Wizards would love, I mean absolutely adore reprinting reserved list cards, and they try all the time in sneaky ways (silver or gold border, near-functional reprints, digital versions, etc.) because reprinting those is good for the company. What it is bad for is investors in the cards. Those are distinct incentives, not a common enterprise, not a security.
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This posts reads like you don't understand the Howie Test. Literally, that decision blew away any offering designed to evade SEC rules. The Test is incredibly general and has never been defeated. Why do you think this time is different?
Lots of things try to "evade" SEC rules by making them not apply, and many are successful. What does "never been defeated" mean, exactly?
Universal statements like this are hard to prove, and easy to disprove.
All you need to do is provide one of your many successful examples.