decentralizedL

I think the key language to focus on in the SEC notice is those “participants” who have a necessary role in the transaction of an unregistered offer and sale of securities are liable for violating Section 5 (page 16). Taken to the extreme, one could argue that even buyers of unregistered securities have a necessary role in the transaction but this is not the kind of activity relevant for Section 5 violations. Section 5 activity is more concerned with things like underwriting, offering, issuing, promoting, and soliciting the offer and sale of unregistered securities that lack a valid registration exemption.

Nah disagree. Most folks building on top of Ethereum are using token sales as a fundraising mechanism to bootstrap their projects, and these projects are raising $100ms of dollars.

The whole "but, but, these tokens have utility" will get old pretty quickly imo and you can see the signaling with sophisticated projects like Protocol Labs' filecoin offering going the Reg D route.

Can't stop won't stop :)

https://www.sec.gov/about/laws/sa33.pdf

"The term ‘‘security’’ means any note, stock, treasury stock, security future, security-based swap, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a ‘‘security’’, or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing."

Yeah, I also helped out with this. It's a good starting point but is by no means conclusive. Debevoise's franchise argument is wayyyy offbase and is subtle legal marketing BS imo

In game digital assets is an interesting hypothetical. Whether or not it satisfies all the prongs of an investment contract analysis is less important than the overall size of the market. I think if blockchain tokens were doing daily vols similar to Team Fortress 2 hats, that the SEC would have never felt the need to comment. But that's just conjecture not anything you could hang your Team Fortress 2 hat on :)

I guess something that's important to consider here is that when I wrote this I was considering whether the Ethereum presale in 2014 would be likely to be classified as a "security". I thought theDAO was a pretty terrible project and wanted to illustrate just how broad "investment contract" analysis could be stretched.

So to take your example, should I decide to pre-sell a commission of several pieces of art that I plan on working, the reasonable expectation of profits seems like a reach bc those who buy art do not solely do so to flip it and make a profit. I wonder whether the same could be said for those who invested in Status, Bancor, and Tezos?

Unfortunately, common law tests like "investment contract" analysis are, by design, super ambiguous.