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prong '(iii)' of the definition of Token ("does not represent a financial interest in a company, partnership, or fund") would arguably exclude all or most 'governance tokens', which are currently much more prevalent & important than 'utility tokens'
the exclusion of interests in partnerships is particularly odd, since: (a) many DAOs may be partnerships and (b) interests in partnerships are presumptive non-securities (Williamson v. Tucker, 645 F.2d 404)
The text was updated successfully, but these errors were encountered:
A token that delivers a financial interest in a company is intrinsically a security. Letting those into this safe harbour basically ensures that the entire VC/stock market moves over to tokenized stocks overnight - it's not going to happen.
Many governance tokens are totally fine, because they don't represent financial interests. Something like UNI, for example, doesn't have a financial interest in Uniswap. I could see some finesse wanted here in terms of allowing for tokens that deliver royalties etc, where there's a financial interest, but it's only an interest in on-chain finance, no links back to a real-world company.
The partnerships stuff likely requires a bit more thinking (but my guess is the SEC isn't going to want to allow new methods of corporate form, or circumvention of corporate form here).
prong '(iii)' of the definition of Token ("does not represent a financial interest in a company, partnership, or fund") would arguably exclude all or most 'governance tokens', which are currently much more prevalent & important than 'utility tokens'
the exclusion of interests in partnerships is particularly odd, since: (a) many DAOs may be partnerships and (b) interests in partnerships are presumptive non-securities (Williamson v. Tucker, 645 F.2d 404)
The text was updated successfully, but these errors were encountered: