1/ Today, without warning, the SEC made clear that it did not consider Ether (or Bitcoin) to be a security. This is a big deal. Here’s why. finance.yahoo.com/news/sec-annou…
2/ People have always known that at some point, the freewheelin’ crypto market would have to prepare for regulation. The stakes have been higher since last August when the SEC indicated they believed that the DAO had been a securities offerings. seekingalpha.com/article/409429…
3/ If the SEC designated all tokens as securities, it could make it impossible for many tokens to be used for their intended purpose. This is why, for example, Wyoming created a designation for utility tokens. To learn more: @CaitlinLong_ on @laurashin unchained.forbes.libsynpro.com/unconfirmed-ca…
4/ What’s more, the SEC hasn’t been the only regulatory body providing their perspective on tokens. @Blockchain_Jay summarized this nicely
5/ Still, it seemed to many watching the space that the SEC was inclined towards a moderate position of token sales as akin securities offerings, but not to blanket label post-sale tokens securities. I wrote about this weird hybrid state: hackernoon.com/schr%C3%B6ding…
6/ Today, the head of the SEC’s division on corporate finance, came out with effectively that position. The ethereum ecosystem is too decentralized for it to be a security in practice, even if its initial token sale might have been. Read the full report: sec.gov/news/speech/sp…
7/ There is a lot to unpack in there, which is why once you’re done reading the speech, you should read this Twitter essay analysis from @msantoriESQ
8/ Most of the community, as you might imagine, was surprised and excited at the news.
9/ Many, like @brucefenton, were quick to agree and begin to defend the SEC’s decision.
10/ Others, like @iamjosephyoung, asked whether we really needed a regulatory body embedded in the system that cryptocurrency was initially designed to disrupt to tell us what is or isn’t a security
11/ At the same time, many people were quick to point out that the way that the SEC had worded things didn’t seem particularly good for Ripple.
12/ There was also, much chagrin from the Bitcoin maximalist community, and, if we’re honest, at least a dose of schadenfreude from the ETH adherents and altcoiners. Some were able to keep their humor
13/ Maybe the most interesting critical question to be surfaced is that, if degree of decentralization is a part of the new Howey test, does that create an insurmountable first mover advantage that will stop newer smart contract protocols?
14/ Nonetheless, for most of the crypto community the announcement was an exciting, rejuvenating force. The markets dipped up into the green continuously for the first time in…well, a bit. Happy Hodling.
APPENDIX/ While this was going on @katherineykwu was live tweeting from a Blockchain and Law panel at @CardozoLaw - it was almost like a post news presser after the SEC announcement
APPENDIX 2/ This analysis from @awrigh01 is essential reading. TL;DR seems SEC is recommending sell tokens to investors in registered ways, distribute to users later
APPENDIX 3/ Further analysis from @msantoriESQ - most interesting to me is 1) the possibility of disenfranchisement of non accredited investors; 2) the possibilities for airdrops and other alternative distribution mechanisms
APPENDIX 4/ @zooko previews the the coming battle to prove our projects’ decentralized bonafides. Because crypto needs more for project partisans to argue about. My decentral is more decentralized than your decentral, baby.
