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Drew Hinkes

@propelforward

Feb 14

Take aways from the #blockfi settlement with the #SEC (sec.gov/litigation/adm……) 1. BIA were notes under the Reves test; one factor is that there is "no alternative
regulatory scheme or other risk reducing factors exist with respect to BIAs" Congress can of course, set out a /1

an alternative framework that would potentially push these sorts of ventures into a different regulatory classification. 2. the offer and sale of notes is an investment contract. Yes, you can be debt and an investment contract; the pooling of assets is the key factor here. /2

3. Blockfi was a 40 act company; 40% of its assets were investment securities - including loans. /3

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Drew Hinkes

@propelforward

Jul 24, 2021

There has been lots of talk about #uniswap front end interfaces blacklisting #tokens that might be #securities. This is not an attack on #DeFi or regulation of #DeFi specifically, but instead a logical example of how existing regulation applies to legally addressable entities /1

including those that facilitate the use of #decentralized systems- in this case, legally addressable interface providers. And this isn’t new. Quietly, many front end providers are also engaged in #sanctions compliance. While laws obviously apply to legally addressable actors, /2

this does not mean that regulation has applied or will be applied directly to protocol code, at least not yet. This is b/c code itself is not legally addressable. It has its own rule-set governing its environment, & law cannot change code, although law can act on people /3

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Drew Hinkes

@propelforward

Jul 19, 2021

Today I published "The Limits of Code Deference" papers.ssrn.com/sol3/papers.cf… Inspired by #theDao, #Dapps & #DAOs, this article explores whether #decentralizedventures can absolutely bind their users to their code’s execution. Not surprisingly, the answer is no. Why? A quick🧵:

These ventures use code to enable groups of people to act collectively to affect rights to #digital assets. We call these “decentralized ventures.” These decentralized ventures enable transactions among their participants in accordance w/rules created and enforced by their code;

human participants in these decentralized ventures interact with the venture, & sometimes with each other, using #smartcontracts. Smart contracts may break, or behave in unexpected ways. What happens when a smart contract defect /error harms a decentralized venture user?

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Drew Hinkes

@propelforward

Apr 20, 2021

@CaitlinLong_

@CaitlinLong_ @uniformlaws @Prof_CarlaReyes I'm very proud of the work done by the brilliant members of the @uniformlaws Digital Asset Working Group incl. @Prof_CarlaReyes @Andrea_Tosato to create this draft. For the twitterati who don't practice law, you may wonder, what's this? & Is it important? YES. A quick #thread

@CaitlinLong_

@CaitlinLong_ @uniformlaws @Prof_CarlaReyes @Andrea_Tosato The proposed new article 12 of the UCC would include rules for commercial transactions of what we’ve termed "controllable electronic records" or CERs. This would include a wide variety of #digitalassets including what we generally call #cryptocurrency along with /2

@CaitlinLong_

@CaitlinLong_ @uniformlaws @Prof_CarlaReyes @Andrea_Tosato #digitalassets that are related to other assets or legal rights such as precious metals-backed assets, certain types of #NFTs etc. /3

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Drew Hinkes

@propelforward

Apr 13, 2021

We've got a new proposed #SEC #token #safeharbor that would let issuers offer tokens in the US. It's big. But, what's new? How is it different from the prior proposal? What's new? You guessed it. It's unavoidable, It's inevitable. It's a #THREAD. Let's dive in/1

Right off the top, we have the elimination of the "good faith" provision that was previously implied upon the issuers in a(1) & of a(4) which required the issuer to act in good faith to "create liquidity for users." /2

New section a(5) includes reference to the new "Exit report" which is a new requirment defined and explained further down but tldr; its a report issued by the issuer's counsel that asserts whether the tokens will be a security or not after the 3 year period. Good inclusion /3

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Drew Hinkes

@propelforward

Apr 13, 2021

@HesterPeirce

Commissioner @HesterPeirce announces her #token #safeharbor 2.0 sec.gov/news/public-st… #crypto #securities

released on #github. here's the link: github.com/CommissionerPe…

3 most significant changes: mandatory semi-annual updates to the plan of development disclosure and a block explorer; exit report requirement with analysis by outside counsel explaining why the network is decentralized or functional, or an announcement that the tokens will

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