Yes. The SEC is indicating that they're not going to apply this retroactively. Any upcoming Initial Coin Offering to US persons, though, is in trouble. Like all the ones listed here.[1]
http://www.ibtimes.co.uk/devcon-2-ethereum-may-pass-howey-te...
Of course, it remains to be seen what this will turn into. Even if it comes crashing down in the United States, that has little effect on the viability in the rest of the world... especially as of late.
I just wouldn't want to try and run an ICO in the US as a resident of the US!
The only question is if the Ethereum Foundation's token sale passes the Howey Test. An analysis of this must be done like was done in their report of the DAO. I'm not qualified to do this analysis, which is why I ask. I know they said Bitcoin was not a security but that's all I know.
Saying "it has other uses than profit" is not sufficient since you'd have to back it up with meaningful evidence (what are the actual uses that investors are getting out of it?)
This true, but the 4 criteria are an AND, not an OR.
This is wrong. SEC rulings apply as soon as your investors are US residents. [1] I know neither of us are lawyers, but at least back up what you claim if it might put people's money at risk.
[1] https://www.sec.gov/divisions/corpfin/internatl/foreign-priv...
The impact would be on their existence within the US, but not internationally. Not with regard to the SEC alone.
edit: Okay, you started as snark, then tightened it up a bit after an edit, but my point still stands.
The question is whether or not what the Ethereum Foundation sold to US residents are securities in the SEC's eyes?
I can see how our wires got crossed.
I interpreted your original comment as questioning whether or not this was a threat to the specific tech or foundation at large, and not just isolated to the US region.
So, I guess the argument is moot -- seems like my mistake. It's certainly up in the air in the US at this point. I do find the progression of events interesting, regardless. In spite of what I said, the US does have a social impact with decisions like this -- just maybe not so much right now as in recent years[0].
I get argumentative because I see a lot of promise. I like technical discussion about it vs. regular degradation, so I usually have something to say.
[0] http://business.financialpost.com/news/economy/imf-predicts-...
Being that token sales are international, it would seem there is absolutely nothing illegal about opening a company in that country and offering securities. Even if the owners of the company are US citizens. Then you have the company pay YOUR company as its main supplier, as opposed to its parent.
Is anyone on HN familiar with such a country?
There's a reason why some crypto-companies (and not crypto actually) are based in the Cayman Islands (BitMEX), British Virgin Islands (Bitfinex), etc... Crypto Valley [0] in Switzerland is also gaining momentum. BTW, Fred Wilson wrote an interesting piece about this recently [1].
But the issue here is that if you plan to sell "tokens" to US nationals, you now know that you must play by the SEC rules. That or you shouldn't offer them to US individuals. Nothing rare about it, for instance CFDs [2] are financial instruments banned in the US, but traded without problems in the rest of the world. My guess is that ICOs will be like CFDs, offered around the world, but not to US citizens.
[0] https://cryptovalley.swiss/
The main question is, are the exchanges considered foreign if the ICO is of a foreign company? How do you trade stuff if the securities are not transferrable?
Perhaps the ICOs don't pass the Howey test!
For example can Israel's Securities Authority retroactively go after companies by classifying ICOs as securities? Or in this case, ALL securities can still currently be sold by Israeli companies to foreigners?
Also, what are the rules for Cyprus and Bulgaria? Where do you get the information about their popularity and their applicable securities laws?
Actually the US regulates companies that so much as offer securities to US citizens. Try getting an account with a forex broker that's based outside the US and you'll see what I mean. The CFTC doesn't limit itself to US companies.
I haven't seen the same attempts being made on other kinds of securities but the framework is clearly there as the CFTC is using it.