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Yea the SEC administrative order includes quite an Orwellian redefinition of "sale", that attempts to expand its scope far beyond what people commonly understan
by CryptoPunk 8y ago
Yea the SEC administrative order includes quite an Orwellian redefinition of "sale", that attempts to expand its scope far beyond what people commonly understand the word to mean:
>Rather, a “gift” of a security is a “sale” within the meaning of the
Securities Act when the donor receives some real benefit.
and
>Tomahawk received value in exchange for the bounty distributions, in the form of
online marketing including the promotion of the ICO on blogs and other online forums.
Tomahawk also received value in the creation of a public trading market for its securities. See
Sierra Brokerage, 608 F. Supp. 2d at 940 (“where a ‘gift’ disperses corporate ownership and
thereby helps to create a public trading market it is treated as a sale”).
The latter, "Tomahawk also received value in the creation of a public trading market for its securities", justification, is alarming. It appears the SEC's definition of a sale is any issuance that benefits the issuer by any means, which is inconsistent with what 'sale' means in standard English, which is an exchange of a good/service for money. The SEC is going beyond just defining a barter exchange (the "bounty" provided in exchange for promotional services rendered) a sales transaction, to considering even none-exchanges as sales transactions.
By the SEC's unbound definition, a charitable issuance of securities that brings goodwill and thus value to a brand would be a sale.
- davidgerard 8y ago> quite an Orwellian redefinition of "sale" but a definition that has cites to where they won in court with said argument, which I think does back them up on this one in any practical sense. Disputing this would require a win in court against said precedent, or a new law.
- CryptoPunk 8y agoYes, it's very well possible that they have a strong legal case - I haven't looked into the precedent they cited. The problem I'm alluding to the administrative order's definition of a 'sale' - whether that definition stems from statute or precedent, or one they constructed just for this case - which doesn't conform to the common definition of the term, leading to a situation where the public is given a naive impression of the scope of the law that is not in accordance with its real scope. This mis-impression is the Orwellian aspect of it.