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0 pointseverdev8y ago0 comments

That's what I understood from my call with the SEC. That if anyone could reasonably expect a profit it satisfied that bullet in the Howey Test.

For your tacos to be securities, the company would have to be working in some capacity to give those tacos more value in the future. Since tacos expire, all reasonable taco investors know that their investment will go to $0 in the near future, therefore no expectation of profit.

It's amazing how broadly security is defined and enforced. The only examples I was able to discuss with the SEC that were not securities were when the asset being sold could not reasonably generate a profit and could not be transferred. Basically like selling a product or accepting a donation.

There is also securities case law where a company sold a security to a single person or very few people and they were sued successfully.

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dragonwriter8y ago

> That's what I understood from my call with the SEC. That if anyone could reasonably expect a profit it satisfied that bullet in the Howey Test.

“reasonably expect”, in law, imposes an “objective” standard; the mere subjective expectation of a buyer won't meet it, the court applying the test will need to find that the expectation was objectively justified in the concrete circumstances that existed. It's a much higher bar than merely did any individual buyer have a subjective expectation of profit.

everdevOP8y ago

I agree, the expectation has to be objectively reasonable.

If the coin has a mechanism where it can always be bought for $1 forever it's reasonable that you can't expect a profit.

But ICOs don't do this. They limit quantity to drive demand of people hoping their limited resource will be worth more in the future.

beambot8y ago

What about taco futures? I would prepay for tacos now, knowing that it's a stable investment that will likely have returns at least as good as inflation.

everdevOP8y ago

If you invest money and the money is used by the taco company to grow their business and your taco futures are transferrable and the value of a taco future can go up through the efforts of the company (their tacos becoming more delicious and therefore going up in price), then I think so.

swombat8y ago

In other words, you’re buying shares in a Taco company...

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0 pointseverdev8y ago0 comments

That's what I understood from my call with the SEC. That if anyone could reasonably expect a profit it satisfied that bullet in the Howey Test.

There is also securities case law where a company sold a security to a single person or very few people and they were sued successfully.

0 comments

dragonwriter8y ago

> That's what I understood from my call with the SEC. That if anyone could reasonably expect a profit it satisfied that bullet in the Howey Test.

everdevOP8y ago

I agree, the expectation has to be objectively reasonable.

If the coin has a mechanism where it can always be bought for $1 forever it's reasonable that you can't expect a profit.

But ICOs don't do this. They limit quantity to drive demand of people hoping their limited resource will be worth more in the future.

beambot8y ago

What about taco futures? I would prepay for tacos now, knowing that it's a stable investment that will likely have returns at least as good as inflation.

everdevOP8y ago

swombat8y ago

In other words, you’re buying shares in a Taco company...

1 more reply

j / k navigate · click thread line to collapse