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notes/are-crypto-tokens-securities.md
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@ -47,7 +47,7 @@ Rufus and Stephen end their conversation with an analysis of this position and t
* Many things can be sold as securities. (stocks, chinchillas, whiskey barrels, orange trees). It’s very context dependent.
* **If we accept the premise that crypto tokens aren’t currencies, then tokens are clearly investments made with the expectation of profit. Are crypto assets unregistered securities?**
* Crypto tokens currently exist partially outside the US securities framework.
* The SEC has taken action against some [Initial Coin Offerings](https://www.sec.gov/ICO), [selling debt instruments to retail](https://www.reuters.com/article/sec-investors-retail-idUSL2N0XB0NU20150414), against outright [Ponzi schemes](https://www.sec.gov/spotlight/enf-actions-ponzi.shtml), and **firms acting as bank-like entities.**
* The SEC has taken action against some [Initial Coin Offerings](https://www.sec.gov/ICO), [selling debt instruments to retail](https://www.reuters.com/article/sec-investors-retail-idUSL2N0XB0NU20150414), against outright [Ponzi schemes](https://www.sec.gov/spotlight/enf-actions-ponzi.shtml), and firms acting as bank-like entities.
* District courts have set precedent in many investment fraud cases that have consistently indicated token sales to US persons meet [Howey Test](../concepts/howey-test.md) and Dodd-Frank criterion of securities sales, even if done internationally (i.e from Switzerland). If you sell to US persons it becomes a security under US law.
* **A federal case or executive order that sets precedent nationally has yet not been heard in the courts.**
* Thousands of companies and projects' success or failure rests on token sales not being regulated as securities. If they are regulated as securities it is quite possible the entire market implodes.