sailor pulse-chan 🧩

Quick walkthrough of today's SEC crypto FAQ: 1.1 A token can separate from its investment contract without the network meeting the SEC's definitions of functional or decentralized. What matters is whether you did what you said you'd do, as you defined it. (which runs the risk of disincentivizing disclosure, as others like @lex_node suggested) 1.2 A typical staking receipt token is either a receipt for a digital commodity or a digital commodity itself. Either way, it's not subject to an investment contract in the described situations. 1.3 A staking receipt token is different from traditional financial instruments because it doesn't transfer ownership or control. It's just evidence (that the asset is yours). 2.1 If you want to avoid investment contract status, don't promote the potential for profits. Beyond that, "potential utility, features, and capabilities with indefinite aspirational statements likely would not, without more," put you within the securities regulatory perimeter. 👀 2.2 If OpCo B assumes Issuer A's promises to further the network, the token stays subject to the investment contract (not sure what suffices as "assume" in this case) 2.3 What can projects do after functionality without re-engaging in the essential managerial efforts? "Secure, maintain, improve, or enhance such a system or its functionality, or to facilitate network effects, whether through sponsoring or funding development projects or other similar activities." 2.4 You can make new statements about your network once it is functional* and has no central party without creating a new investment contract, in most cases. *(defined in FN49 of March guidance as "the system’s native crypto asset can be used on the system in accordance with the programmatic utility of the system.") 2.5 So long as the network is functional* (see above), announcing a buyback is not an essential managerial effort. If not yet functional, pitching buybacks can be essential managerial efforts. 2.6 Secondary trading platforms of crypto assets are not promoters under securities law unless they meet the Rule 405 requirements (in the second screenshot)