1/ Merry Christmas to all celebrating today! I would like to pick up on a point made in the thread below by @BoulevardLP. H/t to @insideNiMA to getting the ball rolling and @r_ross_campbell for the shout out. Will be curious as to thoughts from @lex_node, @propelforward +others.
2/ First, although the Turnkey Jet no-action letter is helpful (as is the @DLxLawLLP letter for @BuyQuarters), undoubtedly the most developed and relevant statement on this topic from the SEC is their April 2019 Token Framework - sec.gov/corpfin/framew….
3/ In addition, although the term “utility token” is commonly used, I would argue it is very unfortunate and confusing. There is no formal category of “utility token” anywhere in US law. A token (or any other asset) either is or is not a “security”.
4/ If a token is considered a “security” in the US, ownership and transfer will be heavily regulated.
5/ However, because the SEC Framework does not prioritize the 60-odd factors listed, It is currently extremely difficult to determine with even moderate certainty how the SEC would treat a given token.
7/ Because we don’t know whether or when the cases moving through the judicial system will produce definitive law, another alternative is legislation. There are a number of bills in the works, some announced and some not yet, that may provide the greatest clarity to the market.
8/ A legislative solution that balances appropriate protections for token purchasers and users with the practical ability for blockchain platforms to become decentralized would be a wonderful Christmas 🎄 present indeed! [end]
