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by collinvine
3189 days ago
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> I do not agree that pre-selling a purely functional token is necessarily an offering of securities under Howey or otherwise Are you a lawyer? Because it wasn't the opinion of the author; it was the opinion of their lawyers. > offering it to the public is not "securities fraud" in and of itself. Right. In the US, you can abide by the new-ish JOBS act for crowdfunding from non-accredited investors. You'd be selling a security. The problem with token sales is that they are trying _not_ to be securities. This may not be "fraud", but it is likely in violation of securities laws. > this article is not useful to anyone else trying to make a similar decision. The takeaway is that no project going forward should do a pre-functional token sale. |
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The takeaway from this article is just wrong, b/c it implies that the SEC thinks token presales are all inherently fraudulent. That is not correct.
Many ICO's are illegal securities offerings, probably. And many are also fraudulent. These two things often overlap. They are not equivalent though.
Howey is a FACT DEPENDENT TEST. That means, if you are planning any kind of token offering, you have to get advice about your specific circumstances.
As a heuristic, "stay away from ICOs" is pretty solid. No one will be harmed by this. Many people will be harmed by participating in crappy ICOs, either as promoters or buyers.
However, HN is a forum for technical discussion, and I'm criticizing the technical basis of that article.