2/ These are defined as “a system that offers protocols and the use of non-firm trading interest to bring together buyers and sellers of *securities*”. (My emphasis.)
Dec 29, 2021 • 9 tweets • 3 min read
1/ This thread (and the various comments/responses within) deserves more attention. There is both incredible promise and incredible risk in including “real world assets” (#RWA) in #DeFi. As usual, @lex_node is asking very relevant questions.
2/ As a long-time RWA securitization lawyer who lived through 2008-9, I speak from direct experience here. The Financial Crisis arose from a paroxysm of yield-chasing leverage financing purportedly “safe” and “high quality” financial assets.
How about let’s not do that again?
Oct 28, 2021 • 10 tweets • 3 min read
1/ Like a strong weather pattern taking shape over the ocean, everyone knew an eventual landfall was coming. And it is here - @FATFNews dropped their final virtual asset service provider (#VASP) guidance this morning:
Whatever policy makers would like to do, the Guidance recognizes that there are significant limitations on what can be prescribed in terms of the implementation of AML/CFT-related checks in DeFi protocols.
Jul 1, 2021 • 5 tweets • 1 min read
1/ We need a third way. Post project fundraise, the core problem is information asymmetry. Relying directly on a project to provide all “material” info to the public is hopeless.
2/ Project disclosure can and should be crowdsourced to a single location (think: Wikipedia).
Social and legal consequences would be meted out to those found to knowingly have provided misleading information (whoever they may be).
Mar 9, 2020 • 17 tweets • 5 min read
Another great discussion initiated by @lex_node based on a valuable piece on @coindesk written by @Frances_Coppola. As with many threads on Twitter, the tone quickly gets ... acerbic but it is a useful starting point to make a couple of important observations in both directions.
2/ As comments in the thread make clear, Coppola is focusing on “tokenizing” fungible and tangible assets. Her (spot on) point is that it is absurd to think that “blockchain“ can fix the trust issue when it comes to tangible IRL assets. However, I want to get to a deeper point.
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….
2/ During the pre-sale (which is open to the general public and not otherwise registered with the SEC), the developer team affirmatively reference the anticipated success of the platform they are building and the attendant economic benefits of owning the yet-to-be-developed token
Jun 26, 2019 • 8 tweets • 7 min read
@lex_node@JoshuaZeidner@jerrybrito 1/ Thanks, @lex_node. There’s actually a fair amount to unpack here. First, it’s important to bear in mind that the definition of “security” in Securities Act sec.2(a)(1) is much broader than just “investment contract”.
@lex_node@JoshuaZeidner@jerrybrito 2/ Also included in the “security” definition are “collateral-trust certificate” and “any certificate of interest or participation in ... any of the foregoing”. Moreover, if tokens were not involved, we would say many “stablecoins” look a lot like asset-backed securities ...
Jun 18, 2019 • 20 tweets • 9 min read
1/ There is quite a lot to digest around #LibraCoin. Much of the discussion so far has focused on the technology elements and the legal and regulatory and framework. I am more intrigued by the underlying economics.
2/ Because the Libra token will both be non-interest-bearing and broadly “stable” in value, there will be a strong economic disincentive to hold it for any period of time. In this respect, it will be similar to the many other “stable coins” already on the market.
May 26, 2019 • 20 tweets • 4 min read
1/ Some Sunday morning thoughts on “security tokens” following the observation of @boironattorney below.
2/ First, I very much agree that you cannot say that security tokens have “flopped” at this early stage of the game. At the same time, we also cannot deny that that the take-up for security tokens from traditional cap mkts players has not lived up to the hype, as of yet.
Mar 30, 2019 • 20 tweets • 7 min read
Saturday morning - time for kids cartoons and ... a (ramen-free) Twitter thread on tokens and securities law! Today’s starting point: this excellent article (decryptmedia.com/6142/will-cons…) by Guillermo Jimenez in Decrypt.
2/ Jimenez looks at the concept of “consumer token offerings” through the lens of the recent sales by FOAM and Civil, companies backed by @ConsenSys. Both sales were open to the general public and not limited only to “accredited investors”.