If you are interested in how the SEC is thinking about crypto tokens as securities, we recommend you watch William Hinman’s recent speech and read its transcript. We’ve included an embed and a link to the speech below.
We think perhaps the most important and interesting part was this:
But this also points the way to when a digital asset transaction may no longer represent a security offering. If the network on which the token or coin is to function is sufficiently decentralized – where purchasers would no longer reasonably expect a person or group to carry out essential managerial or entrepreneurial efforts – the assets may not represent an investment contract. Moreover, when the efforts of the third party are no longer a key factor for determining the enterprise’s success, material information asymmetries recede. As a network becomes truly decentralized, the ability to identify an issuer or promoter to make the requisite disclosures becomes difficult, and less meaningful.
https://www.sec.gov/news/speech/speech-hinman-061418
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