Miles Jennings
@milesjennings
The critical takeaway here isn't about memecoins. It's that the SEC's interpretation of Howey continues to be that an investment contract may exist based on the "economic reality" of an arrangement. The SEC's recent optimistic approach to the industry and the dismissal of many of its cases has led a lot of people to believe that "everything is legal". That's particularly true because most of the cases the SEC has been dropping/settling involved arguments by the defendants that, rather than "economic reality," Howey's investment contract analysis hinged on whether there was a formal contract. So, if the dismissals were a sign that the SEC was accepting of this "predicate contract" argument (and abandoning the "economic reality" argument), nearly every token in existence would be legal. This release confirms the SEC doesn't believe "everything is legal" and that's a good thing.
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McBain
@mcbain
Just so I get what you're say Company A says, "This is a memecoin" and there is none of the hallmarks of the howey test, that's probably ok Company B says, "this is a memecoin" but they offer dividends and make promises about returns and ownership rights, they are probably fucked
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Miles Jennings
@milesjennings
Exactly right. Substance matters over form.
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McBain
@mcbain
I've been researching all the different structures you can take and all the ways people try to get around looking like a security It all felt like theatre It's so great we're finally getting more clarity around here.
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Miles Jennings
@milesjennings
Agreed! It can be tough because a token can be designed to do anything.
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