>You can Google the legal arguments, but suffice it to say that the legislation creating the SEC is old and vague, and anyone, including the SEC, who says that their characterization of tokens is absolutely correct is misleading you.

You've got that backwards. It's the crypto boosters who really, really, really want to avoid securities regulations who are misleading you with nonsensical, contorted non-arguments.

The SEC's characterization of tokens is absolutely correct, and the only people telling you otherwise are those who had hoped to make a buck off of avoiding regulatory scrutiny.

>This doesn't mean these companies are willfully ignoring the law or aggressively pushing the envelope

Yes, it does, without question. The companies doing this are trying to run exactly the sorts of scams and schemes that the laws were designed to protect against.

In this case, the SEC's reasoning looks very reasonable. Telegram is offering contracts that entitle buyers to Grams (digital coins) after the TON Network is developed. People who buy this contract are funding the development of the TON Network, in the hopes that they will obtain a cut of the created value, in the form of Grams.

These contracts are very similar to shares. They're an investment vehicle used to fund a company, which pays off if the company creates something of value. It's the SEC's job to regulate that sort of thing.

The legislation is vague enough, and the possible characterizations of tokens numerous enough, that there are invariably many reasonable interpretations. So it's not like the SEC is necessarily playing fast & loose either, except to the extent they want you to believe it's a slam-dunk. The SEC aggressively leverages that vagueness, but the reality is that vagueness usually benefits the defendant, especially with an increasingly conservative Supreme Court. OTOH, the approach used for SEC case law going back to 1934 is unique, so SEC-related decisions don't always track the direction of administrative law generally. Securities law is like its own quasi common law, a vestige of the tectonic shifts during the Great Depression and Roosevelt era, which makes it somewhat unique in the domain of Federal administrative and criminal law. Unless you really dig down, it's often the case that two sides have drastically different interpretations which are nonetheless both objectively reasonable on their face.

Though maybe it is a slam-dunk. I'm not a practicing lawyer, and certainly not an expert in securities law. I just have enough background knowledge and legal education to know that when it comes to SEC enforcements the legal landscape is often contentious, and that the SEC has a well-known M.O. It's just something to keep in mind as an outsider.

All SEC does is creating jobs for lawyers, fake sense of safety for amateur investors and a vulnerability in every business so it can be exploited once that becomes a profitable idea. Did you know everything is securities fraud?[1]

[1] https://www.bloomberg.com/opinion/articles/2019-06-26/everyt...]

In the SEC's defense, they're tiny and woefully underfunded. That's why they always come out swinging hard, and are so intransigent. They want interpretations that make it easy for them to penalize and convict. Big companies have enough legal resources, as well as enough pull in Washington, to wipe the floor with the SEC unless the law is crystal clear in the SEC's favor. The SEC is hardly the only regulatory agency that wants easier convictions, or is fearful of lobbyist pushback, but it's a perpetual issue with the SEC, and the situation is peculiarly and qualitatively unique.

If the SEC gives a small investor an inch, the big financial houses will extend that into a parsec. And those companies are constantly watching for those opportunities. So, yeah, the SEC isn't shy about picking a fight with the little guys because they only pick fights they think they can win, preferably outside court; the consequences of losing a fight are huge. This strategy isn't unique to the SEC, but it's uniquely consequential to their authority and effectiveness in general. It's an unfair situation all around, but at the end of the day responsibility falls on Congress.

In any event, my point was that if the situation seems confusing, it almost certainly is a confusing situation without any obvious answers.

That explains how they won those cases against small fry like Madoff and Martha Stewart.

Those were exceptionally (almost laughably) easy cases and, IMO, make my point. The hard ones were the myriad cases of ratings and other deceitfulness that led up to the 2008 financial crisis. Only a single top banker was successfully criminally prosecuted, and the list of settlements was infamously underwhelming: https://en.wikipedia.org/wiki/List_of_major_SEC_enforcement_...

For further reading see https://www.propublica.org/article/the-rise-of-corporate-imp... and https://www.theatlantic.com/magazine/archive/2015/09/how-wal...

The headline is clickbait. The article's actual claim is that scandals a torts are securities fraud.