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If you read the Securities Act of 1933 there are TONS of ways to get around SEC rules. And as such I think your intrastate offering idea is a red herring, but

If you read the Securities Act of 1933 there are TONS of ways to get around SEC rules. And as such I think your intrastate offering idea is a red herring, but I'll entertain you: Did you know that anything that is super obviously a security can be completely exempt if it matures or expires in less than 270 days? Its written right there. Turns out there is a huge market called "commercial paper" that takes advantage of this specifically. I personally had no idea about it until I read the law itself. And there are lots of exemptions. Most of them are completely impractical for most of us.

JumpCrisscross 9y ago
> Did you know that anything that is super obviously a security can be completely exempt if it matures or expires in less than 270 days? The United States is a common law country [1]. Implicitly stapled to the law are rulings and SEC rules. TL; DR There are more requirements to the commercial paper exemption than just the 270-day tenor. That said, you are generally correct–there are lots of exemptions to registration. For example, Regulation D provides a safe harbor within which almost all private-company stock is issued [2]. The trouble with ICOs, currently, is promoters seem to be overusing this "we're marketing a product, not a security" line. As a result, they're not taking advantage of these exemptions. Failing to qualify for an exemption is a difficult mistake to undo ex post facto. (The Filecoin ICO mentioned in the article does take advantage of one such exemption.) [1] https://en.wikipedia.org/wiki/Common_law https://en.wikipedia.org/wiki/Common_law [2] https://www.federalreserve.gov/bankinforeg/regdcg.htm https://www.federalreserve.gov/bankinforeg/regdcg.htm Disclaimer: I am not a lawyer. This is not legal nor securities advice.
- ringaroundthetx 9y ago
  > [1] https://www.federalreserve.gov/bankinforeg/regdcg.htm https://www.federalreserve.gov/bankinforeg/regdcg.htm > Disclaimer: I am not a lawyer. This is not legal nor securities advice. Look, we know. Only armchair financial enthusiasts use those disclaimers, and you've made it painfully obvious and its a bit contrived. Federal Reserve regulation D is not the SEC's regulation D that you talked about. Regulation D is not an applicable exemption, neither is Filecoin's use of it, because the secondary markets where people are inevitably going to trade them have to be registered broker dealers to legally trade things that admit they are securities. Unlike private equity, there is nothing that functionally prevents people from trading cryptographic tokens, so it is better for now that the tokens themselves make sure they are NOT securities, not just 'exempt securities'. No matter what Filecoin did, there is still a major infrastructure problem that threatens to hamper all liquidity in this space, unless tokens are structured as products and distinct from the securities market. We've been here before. The SEC tried to regulate commodities. The SEC tried to regulate commodities futures and commodities options. The SEC thought they were covered under the wording of the Securities Act of 1933 but ultimately that just made no fucking sense for commerce. So the people of this country and the representatives thereof created the CFTC. And yet again, the SEC's frameworks makes no sense for this market, where assets can functionally be like a security, like a commodity, and like a currency simultaenously. A new framework isn't out of the question. For new services and sales that happen to use cryptographic tokens, being unambiguously a product isn't out of the question. Being unambiguously a security isn't out of the question.
  - JumpCrisscross 9y ago
    > Regulation D is not an applicable exemption, neither is Filecoin's use of it, because the secondary markets where people are inevitably going to trade them have to be registered broker dealers to legally trade things that admit they are securities Filecoin appears to be using Rule 506(c) of Regulation D, a § 4(a)(2) exemption. Also, you don't need to be a broker-dealer to issue, buy or sell unregistered securities. (You do need to be one if you're doing those things with others' securities [1].) > The SEC tried to regulate commodities. Commodities-trading regulation predates the SEC by over a decade [2]. Every time securities law were written, commodities laws were rewritten [3][4] to explicitly carve commodities out from securities laws. Both agencies compete in the swaps market, due to their shared jurisdiction over securities-based swaps [5][6], but there are deeper reasons behind the CFTC's independence than it making "no fucking sense for commerce." (The short answer has to do with geography and the competing power centers of New York and Chicago.) > A new framework isn't out of the question I agree. But it will probably take an act of Congress to do this. In the meantime, some promoters are violating the law. [1] https://www.sec.gov/reportspubs/investor-publications/divisionsmarketregbdguidehtm.html https://www.sec.gov/reportspubs/investor-publications/divisi... [2] https://en.wikipedia.org/wiki/Grain_Futures_Act https://en.wikipedia.org/wiki/Grain_Futures_Act [3] https://en.wikipedia.org/wiki/Commodity_Exchange_Act https://en.wikipedia.org/wiki/Commodity_Exchange_Act [4] https://en.wikipedia.org/wiki/Commodity_Futures_Trading_Commission_Act_of_1974 https://en.wikipedia.org/wiki/Commodity_Futures_Trading_Comm... [5] https://en.wikipedia.org/wiki/Commodity_Futures_Modernization_Act_of_2000 https://en.wikipedia.org/wiki/Commodity_Futures_Modernizatio... [6] https://en.wikipedia.org/wiki/Dodd–Frank_Wall_Street_Reform_and_Consumer_Protection_Act https://en.wikipedia.org/wiki/Dodd–Frank_Wall_Street_Reform_... Disclaimer: I am not a lawyer. This is not legal nor securities advice.
    - ringaroundthetx 9y ago
      in your grandparent post, you are still linking the Federal Reserve's deposit insurance regulation, while talking about the Securities Exchange Commission's exempt securities offering regulation. I still find that entertaining, let me help you https://www.sec.gov/fast-answers/answers-regdhtm.html https://www.sec.gov/fast-answers/answers-regdhtm.html Classic strawman, I wasn't claiming Regulation D required anyone to be a broker dealer to issue buy or sell an exempt unregistered security. The claim is that reselling it freely requires you to go through or be a broker dealer, unless all buyers are accredited investors.

JumpCrisscross 9y ago

> Did you know that anything that is super obviously a security can be completely exempt if it matures or expires in less than 270 days? The United States is a common law country [1]. Implicitly stapled to the law are rulings and SEC rules. TL; DR There are more requirements to the commercial paper exemption than just the 270-day tenor. That said, you are generally correct–there are lots of exemptions to registration. For example, Regulation D provides a safe harbor within which almost all private-company stock is issued [2]. The trouble with ICOs, currently, is promoters seem to be overusing this "we're marketing a product, not a security" line. As a result, they're not taking advantage of these exemptions. Failing to qualify for an exemption is a difficult mistake to undo ex post facto. (The Filecoin ICO mentioned in the article does take advantage of one such exemption.) [1] https://en.wikipedia.org/wiki/Common_law https://en.wikipedia.org/wiki/Common_law [2] https://www.federalreserve.gov/bankinforeg/regdcg.htm https://www.federalreserve.gov/bankinforeg/regdcg.htm Disclaimer: I am not a lawyer. This is not legal nor securities advice.

ringaroundthetx 9y ago
> [1] https://www.federalreserve.gov/bankinforeg/regdcg.htm https://www.federalreserve.gov/bankinforeg/regdcg.htm > Disclaimer: I am not a lawyer. This is not legal nor securities advice. Look, we know. Only armchair financial enthusiasts use those disclaimers, and you've made it painfully obvious and its a bit contrived. Federal Reserve regulation D is not the SEC's regulation D that you talked about. Regulation D is not an applicable exemption, neither is Filecoin's use of it, because the secondary markets where people are inevitably going to trade them have to be registered broker dealers to legally trade things that admit they are securities. Unlike private equity, there is nothing that functionally prevents people from trading cryptographic tokens, so it is better for now that the tokens themselves make sure they are NOT securities, not just 'exempt securities'. No matter what Filecoin did, there is still a major infrastructure problem that threatens to hamper all liquidity in this space, unless tokens are structured as products and distinct from the securities market. We've been here before. The SEC tried to regulate commodities. The SEC tried to regulate commodities futures and commodities options. The SEC thought they were covered under the wording of the Securities Act of 1933 but ultimately that just made no fucking sense for commerce. So the people of this country and the representatives thereof created the CFTC. And yet again, the SEC's frameworks makes no sense for this market, where assets can functionally be like a security, like a commodity, and like a currency simultaenously. A new framework isn't out of the question. For new services and sales that happen to use cryptographic tokens, being unambiguously a product isn't out of the question. Being unambiguously a security isn't out of the question.
- JumpCrisscross 9y ago
  > Regulation D is not an applicable exemption, neither is Filecoin's use of it, because the secondary markets where people are inevitably going to trade them have to be registered broker dealers to legally trade things that admit they are securities Filecoin appears to be using Rule 506(c) of Regulation D, a § 4(a)(2) exemption. Also, you don't need to be a broker-dealer to issue, buy or sell unregistered securities. (You do need to be one if you're doing those things with others' securities [1].) > The SEC tried to regulate commodities. Commodities-trading regulation predates the SEC by over a decade [2]. Every time securities law were written, commodities laws were rewritten [3][4] to explicitly carve commodities out from securities laws. Both agencies compete in the swaps market, due to their shared jurisdiction over securities-based swaps [5][6], but there are deeper reasons behind the CFTC's independence than it making "no fucking sense for commerce." (The short answer has to do with geography and the competing power centers of New York and Chicago.) > A new framework isn't out of the question I agree. But it will probably take an act of Congress to do this. In the meantime, some promoters are violating the law. [1] https://www.sec.gov/reportspubs/investor-publications/divisionsmarketregbdguidehtm.html https://www.sec.gov/reportspubs/investor-publications/divisi... [2] https://en.wikipedia.org/wiki/Grain_Futures_Act https://en.wikipedia.org/wiki/Grain_Futures_Act [3] https://en.wikipedia.org/wiki/Commodity_Exchange_Act https://en.wikipedia.org/wiki/Commodity_Exchange_Act [4] https://en.wikipedia.org/wiki/Commodity_Futures_Trading_Commission_Act_of_1974 https://en.wikipedia.org/wiki/Commodity_Futures_Trading_Comm... [5] https://en.wikipedia.org/wiki/Commodity_Futures_Modernization_Act_of_2000 https://en.wikipedia.org/wiki/Commodity_Futures_Modernizatio... [6] https://en.wikipedia.org/wiki/Dodd–Frank_Wall_Street_Reform_and_Consumer_Protection_Act https://en.wikipedia.org/wiki/Dodd–Frank_Wall_Street_Reform_... Disclaimer: I am not a lawyer. This is not legal nor securities advice.
  - ringaroundthetx 9y ago
    in your grandparent post, you are still linking the Federal Reserve's deposit insurance regulation, while talking about the Securities Exchange Commission's exempt securities offering regulation. I still find that entertaining, let me help you https://www.sec.gov/fast-answers/answers-regdhtm.html https://www.sec.gov/fast-answers/answers-regdhtm.html Classic strawman, I wasn't claiming Regulation D required anyone to be a broker dealer to issue buy or sell an exempt unregistered security. The claim is that reselling it freely requires you to go through or be a broker dealer, unless all buyers are accredited investors.