Filecoin is supposed to have "commercial usage". But the insiders extracted 2/3 of the cash already.[1] As far as I can tell, the "Filecoin Storage Network" doesn't exist. There's no software you can download. You can't actually store data yet. If ever. A key point from WSGR is that if the ICO precedes the service becoming active, it's a security.

[1] https://tokeneconomy.co/the-analysis-filecoin-doesnt-want-yo...

The value of the token can't come primarily from the person or entity promoting the token sale, but whether there is commercial usage or not is largely orthogonal to whether or not something is a security.

> Our current view is that once the value of the tokens is primarily driven by their commercial usage, rather than by the efforts of the token sponsor or other developers, the tokens should no longer be deemed to be securities. The SEC has not yet addressed this question.

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

The entire point is that you can't get out of going to prison by saying "Our thing is X, therefore it can't also be Y."

From your own link:

> The final factor of the Howey Test concerns whether any profit that comes from the investment is largely or wholly outside of the investor's control. If so, then the investment might be a security. If, however, the investor's own actions largely dictate whether an investment will be profitable, then that investment is probably not a security.

WSGR's position: once tokens are used primarily for commerce, the value will be determined by commercial usage and not by the offerors, so that:

> Tokens that are solely utility tokens should not be securities. If a token-based platform is fully developed and the tokens are widely used commercially on that platform, the tokens generally should not be securities.

And they're wrong. If a token is primarily used for commerce then it's value might come primarily from that usage, or it might not. But it certainly isn't some sort of get-out-of-jail-free card.

I'm still not sure exactly why this didn't happen, but if people can agree that Uber isn't a Taxi, then I think they can also come to the conclusion that an ICO token isn't a traditional security... the world just isn't as black-and-white as we often like to think, and legislators are human beings that have a lot more flexibility around enforcement than people imagine.

At that point, Uber pulled out the brakes and that changed their view on regulations permanently.

Source---straight from Travis (TK) himself.

The question around Uber was whether the laws would be changed to make them a taxi, which after much lobbying they weren't, but they were already fine under the existing laws. As kenbaylor says below, Uber themselves thought the laws would quickly be changed to make their business illegal, so they didn't even get into that market until Lyft forced them to do so.

The difference is that Uber was not created to fleece the masses via investment pump and dump scheme.

As of now, ICOs are purely pump and dump. They are modern day unregistered securities, promoted via modern day version of faxes

taxi drivers are selling their medallions that they used to offer service. They are selling these medallions at a loss because a competitor is eating their lunch.

"Is this token being marketed as an investment opportunity?"

Wrong. What matters is whether the person buying the token is doing so because they think it's going to go up in price. The person selling it could explicitly say that it will never be listed on an exchange or go up in value, but if the person buying it thinks it will go up in value, then the person selling it has committed securities fraud. (That's slightly simplified, but that's the general idea.)

There are plenty of people on this thread (myself included) who believe regulators are overdue in cracking down on this space. No need to invoke a bogeyman.

No, it's based on the language of a statute that's about a decade older.

Now, the statute may be based on older financial models, but that doesn't control the case law, and disrupting the financial model doesn't, in and of itself, amend the statute underlying the case law.