What do you not understand about crypto law or policy that you wish someone would ELI5?

SEC will say "all tokens are securities" but that's baked in by now. If you're afraid of the SEC, find work elsewhere.

Then, two questions: (1) what does the token do and (2) how is it distributed? You want strong arguments on both before dropping the token so you can feel confident you'll win in court if SEC attacks.

What are bad answers to 1 & 2?

What are good answers?

Midwest mom in a California dad bod || Ruthlessly pro Farcaster

Bad on both: selling tokens to retail on the promise of using funds to build a product that makes token price go up.

Good on 1) means token holders don't expect profit based on the creator's future efforts, or don't share profits equally.

Good on 2) means not selling tokens to the public.

(but really, hire a lawyer)

"Equally" references the common enterprise prong of the Howey test. Horizontal commonality typically exists when investors are entitled to a pro rata distribution of profits and losses. But this is a complex issue, vertical commonality is different, and you *really* need your own lawyer if you want to do a token.