“SEC guidance has created a more attractive environment for regulated tech firms like Facebook to offer proprietary cryptoassets integrated into their existing products that can be legally traded on existing crypto-exchanges as non-securities. Meanwhile, the SEC has targeted startup cryptos for increased scrutiny.
The crypto community’s reaction to last month’s SEC guidance ranged from shrugs to consternation. SEC Commissioner Hester Peirce mused that the 38-factor test may “raise more questions than it answers”. These factors, adding to what is referred to as The Howey Test, not only can lead to serious legal ramifications for cryptoasset promoters, including ending their projects and returning investor funds, but also determines whether or not exchanges can list a cryptoasset without violating US securities laws. It can thus mean life or death for projects like KIK, which announced last week that it had sunk $5M into battling the SEC over Howey, after its CEO lamented “spend[ing] more time designing for the SEC than for [it’s] users.” However, since there was apparently little relief for existing crypto projects, the guidance does beg an important question: why issue it in the first place?”
We report a lot about Facebooks crypto venture. We are not obsessive, though. :-). The whole industry is worried that Facebook will single-handedly usurp the space, supersede the start-ups and then destroy the technology with their subsequent failure. The empire strikes back and we are all looking for our own Luke Skywalker to battle the death star.
Speaking of which, some fun must be:
