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> That's putting the cart before the horse. Catching criminals is supposed to be a means to an end; compliance with the law is supposed to be the end, and getti

> That's putting the cart before the horse. Catching criminals is supposed to be a means to an end; compliance with the law is supposed to be the end, and getting people to voluntarily stop doing crimes is a win. "We can't tell people what the law is because then they might stop breaking it" is absurd policy. The questioner was not asking about what the law was. They were asking a future potential case or enforcement action. The questioner in the video could have asked about the law and the details and how it has historically been enforced. They did not though. If they did and questions were still dodged then I might agree with what you are putting out here. At the very least I would think the answerer is not well versed on the topic at hand, but I would want the answer to be straight forward with that. > The whole reason people are arguing about this stuff is that there are no clear precedents (or there are multiple contradictory ones); crypto is similar to a lot of things but not exactly the same as any of them. I do not know about that. I think the majority of new crypto coins that have made it into the ads I see are scams, probably because the ones that are scams push for advertisement more. Of those they seem to fall into pyramid scheme and obvious security that would probably run foul of other laws as well. In these cases if a lawyer is not giving a clear answer then you need to hire a new lawyer. Outside the obvious scams I assume there are people who are at best skirting the law at best and some are turning a blind eye, pretending the law is confusing on the topic when it is really not. So far it seems like the SEC is ruling and enforcing the above cases, clear cut cases. If you have a part of the current enforcement that is on something that is ambiguous rather than pretty clear cut then I would be interested what makes it ambiguous and potentially reading more into it.

lmm 3y ago
> So far it seems like the SEC is ruling and enforcing the above cases, clear cut cases. If you have a part of the current enforcement that is on something that is ambiguous rather than pretty clear cut then I would be interested what makes it ambiguous and potentially reading more into it. This article is in significant part about the SEC going after Coinbase, which made a significant effort to stay on the right side of the rules and only allow crypto tokens that operated in ways that are closely analogous to e.g. frequent flier miles. They wrote a great many blog posts giving their perspective and calling for regulatory clarity.
- arcticbull 3y ago
  > ... which made a significant effort to stay on the right side of the rules and only allow crypto tokens that operated in ways that are closely analogous to e.g. frequent flier miles. They list ICOs by the fistful. I sorted alphabetically and only had to go as far as AAVE to find the first obviously-a-security. They really didn't try and stay on the right side of anything. Frequent flyer miles are generally considered to fall under the IRS rebate rule. They're considered rebates on purchases. There's no investment of money (they're a rebate on a purchase), there's no common enterprise, there's no expectation of profit derived from the efforts of others (after all airlines generally devalue miles 10-20% year over year). It fails all prongs of the Howey test. Not to mention you don't own your frequent flyer miles, the airline program does. If you find me a crypto token that operates 'like a frequent flyer mile' I'll happily tell you why you didn't. > They wrote a great many blog posts giving their perspective and calling for regulatory clarity. They wrote a lot of blog posts, I'll give you that. They have regulatory clarity, they just don't like it. [1, 2, lots of case law]. [1] https://www.sec.gov/corpfin/framework-investment-contract-analysis-digital-assets https://www.sec.gov/corpfin/framework-investment-contract-an... [2] https://www.sec.gov/litigation/investreport/34-81207.pdf https://www.sec.gov/litigation/investreport/34-81207.pdf
  - lmm 3y ago
    > There's no investment of money (they're a rebate on a purchase) Seems pretty dubious when there are well-documented cases of the miles being worth a lot more than the purchase (from the famous pudding guy onwards). Hell, mine explicitly advertises the option to "buy miles". > there's no common enterprise, there's no expectation of profit derived from the efforts of others Miles become more or less valuable depending on how well the airline is doing, exactly like how these tokens tend to go. > Not to mention you don't own your frequent flyer miles, the airline program does. The whole point of Howey is that the details of the ownership structure don't matter, the overall economic effect is what does.
    - davorak 3y ago
      > Miles become more or less valuable depending on how well the airline is doing, exactly like how these tokens tend to go. You can sell your token in this case right, but you can not sell the airline miles, not in the rule/tos of the miles program, at least that is my understanding. >> Not to mention you don't own your frequent flyer miles, the airline program does. >The whole point of Howey is that the details of the ownership structure don't matter, the overall economic effect is what does. This does not seem the structure or details of ownership, it is flat out whether you own the miles or not. If you have an example of token that acted more like an airline miles and there is an action against it or because of it I am interested to read more about that token and SEC reasoning.

lmm 3y ago

> So far it seems like the SEC is ruling and enforcing the above cases, clear cut cases. If you have a part of the current enforcement that is on something that is ambiguous rather than pretty clear cut then I would be interested what makes it ambiguous and potentially reading more into it. This article is in significant part about the SEC going after Coinbase, which made a significant effort to stay on the right side of the rules and only allow crypto tokens that operated in ways that are closely analogous to e.g. frequent flier miles. They wrote a great many blog posts giving their perspective and calling for regulatory clarity.

arcticbull 3y ago
> ... which made a significant effort to stay on the right side of the rules and only allow crypto tokens that operated in ways that are closely analogous to e.g. frequent flier miles. They list ICOs by the fistful. I sorted alphabetically and only had to go as far as AAVE to find the first obviously-a-security. They really didn't try and stay on the right side of anything. Frequent flyer miles are generally considered to fall under the IRS rebate rule. They're considered rebates on purchases. There's no investment of money (they're a rebate on a purchase), there's no common enterprise, there's no expectation of profit derived from the efforts of others (after all airlines generally devalue miles 10-20% year over year). It fails all prongs of the Howey test. Not to mention you don't own your frequent flyer miles, the airline program does. If you find me a crypto token that operates 'like a frequent flyer mile' I'll happily tell you why you didn't. > They wrote a great many blog posts giving their perspective and calling for regulatory clarity. They wrote a lot of blog posts, I'll give you that. They have regulatory clarity, they just don't like it. [1, 2, lots of case law]. [1] https://www.sec.gov/corpfin/framework-investment-contract-analysis-digital-assets https://www.sec.gov/corpfin/framework-investment-contract-an... [2] https://www.sec.gov/litigation/investreport/34-81207.pdf https://www.sec.gov/litigation/investreport/34-81207.pdf
- lmm 3y ago
  > There's no investment of money (they're a rebate on a purchase) Seems pretty dubious when there are well-documented cases of the miles being worth a lot more than the purchase (from the famous pudding guy onwards). Hell, mine explicitly advertises the option to "buy miles". > there's no common enterprise, there's no expectation of profit derived from the efforts of others Miles become more or less valuable depending on how well the airline is doing, exactly like how these tokens tend to go. > Not to mention you don't own your frequent flyer miles, the airline program does. The whole point of Howey is that the details of the ownership structure don't matter, the overall economic effect is what does.
  - davorak 3y ago
    > Miles become more or less valuable depending on how well the airline is doing, exactly like how these tokens tend to go. You can sell your token in this case right, but you can not sell the airline miles, not in the rule/tos of the miles program, at least that is my understanding. >> Not to mention you don't own your frequent flyer miles, the airline program does. >The whole point of Howey is that the details of the ownership structure don't matter, the overall economic effect is what does. This does not seem the structure or details of ownership, it is flat out whether you own the miles or not. If you have an example of token that acted more like an airline miles and there is an action against it or because of it I am interested to read more about that token and SEC reasoning.