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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. If the protocol is already specif

> I do not agree that pre-selling a purely functional token is necessarily an offering of securities under Howey or otherwise. If the protocol is already specified, and the token has clear utility. I agree it's not necessarily going to be deemed a security, and I am not a lawyer, but from my reading of Howey and related decisions I would say whether an instrument is deemed a security will come down to how it was marketed and what the general expectation and intent of the purchasers seemed to be. Since Howey emphasizes that only the function of the instrument matters, not the form, I would say that even if a cryptocurrency has use value, it could still be deemed a security if a large fraction of its purchasers mainly expect to achieve a passive profit by buying it. After reading the blog post, I can see why the Colony developers are being cautious

jon_richards 9y ago
Do concert tickets count as securities? What about when most of the tickets are bought by resellers using bots? Genuinely asking, seems like a badly worded law.
- AlexCoventry 9y ago
  That's an interesting question. Based on this huge back and forth I think it's a gray area, where the details of the instrument matter a lot: https://www.sec.gov/divisions/corpfin/cf-noaction/ticketreserve091103.htm https://www.sec.gov/divisions/corpfin/cf-noaction/ticketrese... I don't know that it's a badly written law so much as one which gives its enforcers and arbiters a lot of latitude to decide its jurisdiction because the bad behavior it's trying to control is so hard to pin down legislatively. The law could certainly be abused, and probably has, but the cases I've read have left me with nothing but admiration for the wisdom and consideration with which it's been applied. And that's despite the fact that I have a generally libertarian bent and a general dislike of over-broad laws.
- collinvine 9y ago
  It's a good question. From what I've read, they act like securities leading up to the event, but only for a one off event. Afterwards the instrument (ticket) has no value. That makes it unlike a security.
zekevermillion 9y ago
Yes, I believe that's right.

jon_richards 9y ago

Do concert tickets count as securities? What about when most of the tickets are bought by resellers using bots? Genuinely asking, seems like a badly worded law.

AlexCoventry 9y ago
That's an interesting question. Based on this huge back and forth I think it's a gray area, where the details of the instrument matter a lot: https://www.sec.gov/divisions/corpfin/cf-noaction/ticketreserve091103.htm https://www.sec.gov/divisions/corpfin/cf-noaction/ticketrese... I don't know that it's a badly written law so much as one which gives its enforcers and arbiters a lot of latitude to decide its jurisdiction because the bad behavior it's trying to control is so hard to pin down legislatively. The law could certainly be abused, and probably has, but the cases I've read have left me with nothing but admiration for the wisdom and consideration with which it's been applied. And that's despite the fact that I have a generally libertarian bent and a general dislike of over-broad laws.
collinvine 9y ago
It's a good question. From what I've read, they act like securities leading up to the event, but only for a one off event. Afterwards the instrument (ticket) has no value. That makes it unlike a security.

zekevermillion 9y ago

Yes, I believe that's right.