1/ "The digital asset itself is simply code. But the way it is sold – as part of an investment; to non-users; by promoters to develop the enterprise – can be, and, in that context, most often is, a security – because it evidences an investment contract." sec.gov/news/speech/sp…
2/ "Simply labeling a digital asset a ‘utility token’ does not turn the asset into something that is not a security…the economic substance of the transaction always determines the legal analysis, not the labels." -Hinman (SEC)
3/ "If the network on which the token or coin is to function is sufficiently decentralized – where purchasers would no longer reasonably expect a person or group to carry out essential managerial or entrepreneurial efforts – the assets may not represent an investment contract."
4/ "Impetus of the Securities Act is to remove the information asymmetry b/w promoters & investors. In a public distribution, the Securities Act prescribes the information investors need to make an informed investment decision, & the promoter is liable for material misstatements"
5/ Those are my takeaways from Hinman's watershed commentary yesterday. I look forward to #crypto going back to the magic of magic internet money: minting an asset over time directly in exchange for human or machine *work,* largely prioritizing labor over capital.
