Post
Topic
Board Altcoin Discussion
Re: The SEC Called About Our ICO, I Answered
by
benjacoin
on 29/07/2017, 04:52:52 UTC
How do you answer this:

"It’s important to ask the question of whether there is an expectation of profit by the buyer of a token. If so, there’s trouble"

?

There are some instances where this is very obviously the case - especially with tokens that promise to pay dividends or invest in subsequent projects (especially things like real estate, etc.). ICOs/tokens like this fail the Howey Test right off the bat.

Tokens that have a utility, like those where it's necessary to use have tokens to use a service, are on the other end of that spectrum. The buyer motivation is function, not investment or gains on the value of the token.