TheCorporateCounsel.net

I, like some securities practitioners, went through the crazy ICO fervor of a few years ago feeling like the most unpopular guy at the party, because I kept saying “these sure look like securities to me” and spouting off about a seven decades-old Supreme Court case that dealt with the sale of orange groves. On top of all that, I did not look very convincing in a hoodie. As any unpopular partygoer would do, I retired to the sidelines and became more of a wallflower amidst the ICO rager that ultimately got broken up by the SEC when the Staff made clear that selling tokens often did involve the offer and sale of a security.

But rather than just saying “I told you so,” I recognized that just because something is novel does not mean that we have to fear it, rather we should embrace the challenge of determining how to make it work within the framework of the laws and regulations that exist to protect investors. When I served as Chief Counsel of Corp Fin, we received many no-action requests on the topic of whether something was a security, and the Staff always considers those with an open mind. Sometimes, the answer is “this is a security,” but other times it is the opposite result. What the requesters always wanted was some certainty about the subject transaction before it occurred, and that is what more SEC regulation in the crypto space could bring – the certainty to operate in an area that is constantly evolving.

– Dave Lynn