The SEC appears to have taken very thoughtful action on two crypto projects to date. Nay-sayers are predicting the end, while proponents of crypto dismiss the actions.
Here’s a quick analysis of what is actually happening. The two recent steps by the SEC were:
- The SEC actually issued a letter on one project — the ill-fated DAO. This was a project that allowed investors in the token to pool their funds and invest in other crypto companies (including C Corps that were in the crypto space). This was a clear sale of securities under almost anyone’s definition, as the investors were to receive ownership in a variety of crypto startups.
- The SEC recently contacted Protostarr and as a result of the verbal inquiry, Protostarr decided to “shut down and return all funds.” What was Protostarr doing? They were securitizing the income stream of YouTubers and Twitch casters, by letting investors get a percentage of the future revenues of those stars.
In both cases, even a…