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From the wikipedia article it seems the Howey test is the legal test if something is a security: "an investment contract for purposes of the Securities Act mea
by asperous 5y ago
From the wikipedia article it seems the Howey test is the legal test if something is a security:
"an investment contract for purposes of the Securities Act means a contract, transaction or scheme whereby a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party, it being immaterial whether the shares in the enterprise are evidenced by formal certificates or by nominal interests in the physical assets employed in the enterprise."
So presumably the logic is, lend is a security because people are "investing" securities in a contract and expecting returns not through their own efforts.
Sec has additional guidance here: https://www.sec.gov/corpfin/framework-investment-contract-analysis-digital-assets https://www.sec.gov/corpfin/framework-investment-contract-an...
- cormacrelf 5y agoThe funny part is that Howey was about selling parcels of orange grove land to people who would then lease (“Lend”) it back. Howey would then cultivate oranges on the whole block of land, and distribute the profits to the landowners, who would not have to lift a finger. Coinbase is not only satisfying the Howey test, it’s doing almost exactly the same thing as the OG and acting all surprised the SEC considers it a security. This is like accidentally sealing a snail in a bottle of kombucha and making a blog post about how you don’t think it constitutes negligence because you haven’t read Donoghue v Stevenson but you heard it was actually about ginger beer.