SEER through Howey test

Reporter: pencil boxn

Howey test is to determine whether a financial instrument is an effective means of “securities”, the United States recently issued a SEER law firm “Howey Test” report that the SEER and SEER tokens do not belong to the securities, do not have to be included in the United States Securities Regulatory oversight by the Commission (SEC).n
Under the Securities Act and the Securities Exchange Act of the United States, all securities must be registered and dealt with by the Securities and Exchange Commission (SFC) and be exempt from registration requirements.n
The case of SEC v. WJ Howey Co. of 1946 and the resulting Howey Test is an important criterion for judging whether a financial instrument is an “investment contract,” and if it is determined to be an investment contract, Defined as securities, Howey Test mainly has the following conditions to judge:n
n(1) Use money to invest;n
(2) invest in a common businessn
(3) Expect to profit yourself.n
(4) solely due to the sponsor or third party’s efforts;n
nA US law firm conducted a Howey Test on SEER tokens if they were all considered securities in full compliance with the above four judgments and concluded that:n
n(1) Investing with money: According to the Howey case and the associated case, the definition of money investment includes capital, assets, cash, notes, and inputs for goods and services. The courts and the SEC do not limit the definition of “money” to legal tender, but all the subject matter widely regarded as embedded is considered money. Especially in The DAO tokens case, ETH and other related cryptographic tokens are also considered money in the Howey Test.n
Therefore, the SEER tokens satisfy this condition because the SEER tokens are required to pay for encrypted tokens or legal coins.n
(2) invest in a common enterprise: In this condition, the courts in different parts of the United States all test with different test methods, but mainly from these three directions:n
(A) horizontal commonalities: a common enterprise, a number of investors put money into the pool and used for investment, and the amount of profit the investor is based on the proportion of money invested in the pool of funds to decide .n
The SEER tokens’ token sales activities are tantamount to putting them into a pool of funds and are pro-rated, so SEER tokens meet this criterion based on a horizontal commonality comparison.n
(II) Narrow vertical generality comparison: The profit of the token holder is related to the promoters.n
As the promoters to buy and hold SEER tokens, whether there are many controversial points in the opinion of lawyers, this condition is not satisfiedn
(C) Comparison of Generalized Vertical Commonality: Whether or not the profits of investors relate to the professional skills of promoters.n
This condition is quite likely to be met, as investors are rewarded for the developer’s expertise in the blockchain.n
(3) Expect to Profit: According to Howey Test, profit is defined as the investor’s expectation that his return will come from his investment. (Not system or issuer can earn). Because the sources of profits are varied, making profits does not necessarily mean that the securities must be the securities. The court judges whether the securities are mainly “third-party efforts,” so the key to the establishment of this Article lies in Article IV.n
(4) Just because of the sponsor or third party’s efforts:n
(A) Since token holders purchase tokens are not necessarily for investmentn
(Ii) Platform does not warrant returns – it is not necessarily predictive of market participants’ returns in predicting market participants who may lose their mortgaged SEER tokens because of false forecasts.n
So this does not hold.n
nConclusion: Based on the above analysis, the second condition may not meet the third and fourth conditions completely inconsistent, therefore, the United States law firm that SEER tokens do not meet the definition of securities, the federal securities law does not apply In SEER tokens.n
For crypto-token exchanges, some of the listed tokens may be subject to regulation if they are defined as securities (eg, The DAO project). HoweTech through SEE tokens means SEER projects can be regulated in the United States or elsewhere Of the exchanges will not pose a potential policy risk to the exchange.n

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