Quote from: squatter on August 19, 2017, 07:03:32 AM

Quote from: CrYpToChRi$ on August 19, 2017, 12:31:36 AM

I have not heard too much talk regarding the recent (July 25th, 2017) release of the DAO Investigative Report. It clearly states that US citizens who participate in ICOs that are considered securities can be legally held liable. I understand no charges were brought in this case in particular, but what does this mean for US citizens who invested into other ICOs?

Full report: https://www.sec.gov/litigation/investreport/34-81207.pdf
US Investors held liable: http://imgur.com/a/IcNYx

Recently the SEC declared the DAO as securities: https://www.sec.gov/news/press-release/2017-131

Basically this means that they are subject to the agencies regulations. From their standpoint, these tokens are a form of shares and selling them without licenses violates federal securities laws. Many pI eople who were unable to access ICOs because of geo-restrictions used VPNs. From my knowledge, the reasons ICO providers prevented US citizens from participating was to protect themselves legally from the United States government. That is true, but also note that the investor themselves can be at fault as well.

Reference this thread by Marco Santori, who is well known when it comes to law and cryptocurrency. He had this to say about the recent SEC statements. Please pay close attention to #6. Let me know your thoughts!

https://twitter.com/msantoriESQ/status/890200014370287620
https://twitter.com/msantoriESQ/status/890187373828616192

Sounds like we need to hire a lawyer to know which tokens are safe to invest in, based on that tweet thread. In fact, knowing Marco Santori‏, that thread was a big advertisement to provide exactly that service. Tongue

I gave the SEC decision a look over, and my take is that they are taking a hands-off approach. I don't think they are going to find investors at fault for anything. It's more of a question of establishing a test for future cases against those offering unregistered securities (including exchanges that allow trading of such tokens for US customers).

you dont need a lawyer. you only need the howey test

observe:

http://consumer.findlaw.com/securities-law/what-is-the-howey-test.html

Quote

The "Howey Test" is a test created by the Supreme Court for determining whether certain transactions qualify as "investment contracts." If so, then under the Securities Act of 1933 and the Securities Exchange Act of 1934, those transactions are considered securities and therefore subject to certain disclosure and registration requirements....

....The Supreme Court, in issuing its decision finding that the defendants' leaseback agreement is a form of security, developed a landmark test for determining whether certain transactions are investment contracts (and thus subject to securities registration requirements). Under the Howey Test, a transaction is an investment contract if:

It is an investment of money
There is an expectation of profits from the investment
The investment of money is in a common enterprise
Any profit comes from the efforts of a promoter or third party

Essentially, when you look at a whitepaper, look at the reason they are issuing you a token. Is there an expectation of profit? Not a speculative valuation spike, like the UET, but profit sharing/interest. If so, its a security.

Its that simple