Thread by @APompliano

1/ Yesterday an SEC official delivered a prepared speech stating that Ethereum wasn't a security.

Time for a thread on why this battle isn't over yet 👇🏽👇🏽

2/ First, this statement wasn't an official ruling by the SEC but rather comments from a single individual. It would be hard to believe the SEC didn't approve these comments so I doubt they would rule differently, but anything is possible in crypto.

3/ When the SEC issues an official ruling that Ethereum is not a security, it is an important step. However the legal precedent won't be set until a court of law upholds the SEC's position or strikes it down.

This could take years and potentially go all the way to Supreme Court.

4/ The statement yesterday also explicitly called out that Ethereum may have been sold as a security previously. I doubt the SEC will make an official ruling on the initial issuance of Ethereum but it leaves the door open for regulators to enforce on other projects in the future.

5/ I'm personally most interested to see how regulators deal with the new mechanism of "security evolution" - where an asset is a security at issuance but evolves over time to become a utility (non-security).

So far they claim that securities law will not be changed.

6/ If securities law is not changed, 2017 may have seen the last true ICOs for non-accredited investors in the US that could be used to fundraise the initial development of a decentralized network.

This would force the ICO market to look more like crowdfunding and venture market

7/ I anticipate that entrepreneurs will continue playing a cat-and-mouse game with regulators on the ICO funding mechanism and existing securities law.

We're already seeing this with airdrops, geographies, investors verifications, etc.

8/ We have done founders a disservice by glorifying the work of Uber/Airbnb as they battled housing & taxi authorities. It is one thing to battle those organizations, but different game to battle US securities law.

Founders shouldn't play with fire -- they will get burnt here.

9/ The regulators deserve quite a bit of credit for their work to date. They have been thoughtful with their words & actions. They haven't jumped to conclusions or prematurely banned a new innovation.

Hopefully this thoughtfulness continues.

10/10 It looks like fully decentralized, existing networks are going to be safe for now. This is a net good for the cryptocurrency and utility markets.

I'm excited to see what these talented teams build moving forward. As always, the virus is spreading 🚀