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> never did I say nor would I suggest that we are selling securities of any kind Probably the most relevant part of the SEC's report on the DAO [0] for you is
by hudon 9y ago
> never did I say nor would I suggest that we are selling securities of any kind
Probably the most relevant part of the SEC's report on the DAO [0] for you is this sentence: "These offers and sales have been referred to, among other things, as “Initial Coin Offerings” or “Token Sales.” Accordingly, the Commission deems it appropriate and in the public interest to issue this Report in order to stress that the U.S. federal securities law may apply to various activities, including distributed ledger technology, depending on the particular facts and circumstances, without regard to the form of the organization or technology used to effectuate a particular offer or sale."
To put it simply: it doesn't matter what you call it. If it passes the Howey test, they'll deem it a security. If I fold my company's share into a paper airplane and call it a "utility share" (or "AirShare" ;) ) because I now have a use for the piece of paper, it's still a security.
[0] https://www.sec.gov/news/press-release/2017-131 https://www.sec.gov/news/press-release/2017-131
- seibelj 9y agoYes, as with every company that ICO's, we are acutely aware of the Howie test and have paid lawyers a lot of money to review our business model and white paper. But the lack of clarity from the SEC means we and every other company are somewhat in the dark.
- hudon 9y agoOK, but you realize that the blockchain in your case is only used because regulation exists right? As in, if the SEC did not exist, you could just sell shares on an open market without registering. But you're using the blockchain so you don't have to do this. Is this correct? I understand your token thingie can be used like a digital coin to redeem for data, but surely that doesn't require a blockchain... you can just do internal accounting of the digital coins in MySQL? Then you wouldn't have to pay the Ethereum network for every state change or transaction so you could cut costs. EDIT: I just had a realization. This means you intentionally chose inefficient tech (Ethereum as a database for your coin) JUST so you can pay for a regulatory circumvention mechanism. Oh god...
- exelius 9y agoMost Silicon Valley companies are based around regulatory circumvention in some way. But you're right; in this case you're just trading the SEC's governance for Ethereum's. I'm not sure that's a good tradeoff.
- aetherson 9y agoMost SV companies are based around regulatory circumvention?
- wmf 9y agoNah, just the unicorns.
- aetherson 9y agoUber -- sure AirBnB -- sure Palantir -- They may be scummy in other ways, but I don't think they're based on avoiding regulations WeWork -- I don't think they're ignoring zoning or whatever SpaceX -- No. But maybe they don't count because LA? Pinterest -- No. Dropbox -- No. Stripe -- No. Hulu -- No. Lyft -- sure Magic Leap -- Nope. Zenefits -- Okay, sure. Cloudera -- Not even a little. Credit Karma -- I don't think so. Docusign -- No. That's how far down the list of wikipedia's unicorn startups I got before I got bored.
- exelius 9y agoI disagree on a couple of these (SpaceX being the biggest) but yeah, I do think a lot of what comes out of Silicon Valley are solutions to the problems of business owners created by regulation. Notice the way that is phrased. The whole backlash across the western middle class against the "liberal elite" is a sense of "all tech has done for me is replace my nice union job with a gig job driving for Uber". There is a real sense that Silicon Valley doesn't have to play by the same rules as the rest of us, and people want that to stop.
- 9y ago