Fix spelling, typos, grammar

notes/are-crypto-tokens-securities.md

@@ -38,9 +38,9 @@ Rufus and Stephen end their conversation with an analysis of this position and t
 * Gave rise to a modern framework of laws that cover financial products from debt instruments, bonds, equities, and derivatives. The legal foundation on which all of market capitalism is built.
 * **Because of their centrality to markets, securities have strict registration, ownership and transfer regulation.**
 
-## The Debate Aurrounding Crypto Investments
+## The Debate Surrounding Crypto Investments
 
-* There is currently debate about how crypto investments fall under the existing securities regulatory framework. This is being debated inside the government regulatory agencies, on the floor of the senate, and in the courts.
+* There is currently debate about how crypto investments fall under the existing securities regulatory framework. This is being debated inside the government regulatory agencies, on the floor of the Senate, and in the courts.
 * The outcome of the final ruling will potentially impact trillions of notional value in “scofflaw” investments of potentially unregistered securities.
 * Landmark case from 1946, SEC vs W. J. Howey Co. set the [Howey Test](../concepts/howey-test.md) precedent for determining what is a securities contract.
   * (1) an investment of money, (2) in a common enterprise, (3) with the expectation of profit and (4) to be derived from the efforts of others.
@@ -48,11 +48,11 @@ Rufus and Stephen end their conversation with an analysis of this position and t
   * **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. 
-  * 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.
+  * District courts have set precedent in many investment fraud cases that have consistently indicated that token sales to US persons meet [Howey Test](../concepts/howey-test.md) and Dodd-Frank criteria 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.
-* Sale of securities depends who you are selling to, and what kind of risk and return are presented in the prospectus. 
-  * Selling to the general public is highly regulated, with lots of disclosures, auditing of financials by PWC, Deloitte, etc, and transparency in ownership and inside stock sales.
+  * 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.
+* Sale of securities depends on who you are selling to, and what kind of risk and return are presented in the prospectus. 
+  * Selling to the general public is highly regulated, with lots of disclosures, auditing of financials by PWC, Deloitte, etc., and transparency in ownership and inside stock sales.
   * Selling securities to institutions and high net worth individuals is not as highly regulated. SEC defines “accredited investor” as:
     * A company you are a director of.
     * A limited liability company or family office with over $5 million.
@@ -60,8 +60,8 @@ Rufus and Stephen end their conversation with an analysis of this position and t
   * Case example: Theranos raised $724 million from private accredited investors including Henry Kissinger and Betsy Devos. The people in the blast radius of the fraud were all fabulously wealthy and invested capital they already allocated to high-risk investments anyways.
   * Many policymakers on both sides of the aisle debate whether or not the accreditation laws are too restrictive and shut the public out of high-risk-high-return investments that only wealthy people have access to.
     * On the right, then individual choice is a paramount, the government shouldn’t dictate risk-taking in markets. Just “evolution” and the natural state of being.
-    * On the left, Pikkety’s analysis that wealth generated from capital grows faster than economic output and patrimonial capitalism leads to distortions of markets and inequality. 
-### Steel Manning the Position that Crypto Investments Should Not Be Brought Within Tformhe Securities Regulation Framework
+    * On the left, Pikkety’s analysis that wealth generated from capital grows faster than economic output and that patrimonial capitalism leads to distortions of markets and inequality. 
+### Steel Manning the Position that Crypto Investments Should Not Be Brought Within The Securities Regulation Framework
 * It is very easy to create an equity crowdfunding and cap table structure on top of crypto platforms like [ethereum](../concepts/ethereum.md).
   * Individuals can do it anonymously and raise billions of dollar equivalents in seed capital for ventures that are very early. Don’t need to involve the SEC, government or lawyers at all.
   * Previously this kind of access was gated to US persons with connections and access to funds, connections and access to capital.
@@ -73,17 +73,17 @@ Rufus and Stephen end their conversation with an analysis of this position and t
 
 ### Analysis 
 
-* We tried the complete laissez faire caveat emptor securities model in the 1920s. **It ended very badly**.
-* The kind of fly-by-night “There Will Be Blood” type of charlatans ran wild selling securities to the public.
+* We tried the complete laissez-faire *caveat emptor* securities model in the 1920s. **It ended very badly**.
+  * The kind of fly-by-night “There Will Be Blood” type of charlatans ran wild selling securities to the public.
   * Most US states created Blue Sky Laws to  "to stop the sale of stock in fly-by-night concerns, visionary oil wells, distant gold mines and other fraudulent exploitations."
-  * History is repeating itself exactly like it did then. **Shibu Inu and Dogecoin were the blue sky securities of the 1920s**. People were attracted to get rich quick schemes back then just as much as they are today. Human psychology is remarkably invariant across time.
+  * History is repeating itself exactly like it did then. **Shibu Inu and Dogecoin were the blue sky securities of the 1920s**. People were attracted to get-rich-quick schemes back then just as much as they are today. Human psychology is remarkably invariant across time.
 * As part of the New Deal, the United States signs into law the Securities Act of 1933, Glass-Steagall Act of 1933, Securities Exchange Act of 1934. These largely clean up the fraud. The US framework is the blueprint for many industrialized nations to do the same.
   * The Great Depression ends and the US is victorious in WWII.
   * A long peace in financial markets. 
   * Bank runs are entirely eliminated.
   * US capital markets become extremely large, robust and a new era of unrivalled growth and private innovation.
   * Centrist Hypothesis: Regulated capital markets, taken on the whole arc of human history, produce relative prosperity.
-* According to the SEC crypto tokens meet the Howey test and thus are securities contracts.
+* According to the SEC, crypto tokens meet the Howey Test and thus are securities contracts.
   * This fits with our general intuition about the intent and purpose retail day traders are buying them. They’re investing in common ventures with the expectation of profit from the sale of tokens the same as equity.
   * The enterprises possibly now exist as anonymous internet entities and Discord servers now instead of law firms and board rooms.
   * Some [DAO](../concepts/dao.md) governance tokens quite literally are designed to imitate voting shares as seen in existing equity structures.
@@ -100,7 +100,7 @@ Rufus and Stephen end their conversation with an analysis of this position and t
     * There’s a perverse incentive to simply abscond with seed money rather than actually build anything.
     * There’s a perverse incentive to build technical Potemkin villages that focus on “token value go up” without building anything. Many crypto companies are here.
       * Can read the whitepapers of these companies and even people with PhDs in econ and software engineering can’t parse what they’re doing. ***How is the lay public going to do due-diligence on claims of financial perpetual motion machines?***
-* Is there an legal investment vehicle structure that balances the risks of retail investors with their desire for access to high risk early ventures? 
+* Is there a legal investment vehicle structure that balances the risks of retail investors with their desire for access to high-risk early ventures? 
   * Or should we simply bracket these kinds of securities sales to the already-wealthy? Because the check-size to risk ratio just empirically fits in the “Goldilocks zone” of the practical regulatory/legal/public-interest concerns.
   * Where should the accredited investor red line be?
   * Can the courts scale to handle millions of new investment fraud cases every year?