As crypto litigation hits the headlines, many in the blockchain space are focused on the U.S. Securities and Exchange Commission's (the “SEC”) recently filed complaint against Kik Interactive Inc. (“Kik”). However, at least some crypto lawyers believe that, in the near term, the New York Attorney General’s (the “NY AG”) ongoing proceeding against Bitfinex, Tether and others may have greater consequences for the industry.
On June 4, 2019, the SEC filed a complaint in federal court in the Southern District of New York (the “Kik Complaint”) against Kik, a Canadian corporation that, in 2017, raised roughly $100 million in the aggregate through its popular and well publicized private pre-sale and public sale of the Kin token. The Kik Complaint was not entirely unexpected. In late 2018, Kik released publicly a Wells Submission prepared by its counsel following Kik’s receipt from the SEC of a Wells Notice, asking for reasons for which the SEC should not take enforcement action against Kik. More recently, Kik announced that it already had spent approximately U.S.$5 million funding its legal defense and launched a Crypto-Defense Fund for which some prominent companies and individuals within the blockchain ecosystem lent their support.
Indeed, some believe that Kik – as the first token seller to publicly contest the SEC’s determination that it sold digital tokens constituting securities and did not qualify for an exemption from registration – is an important industry test case. To Kik's supporters, the SEC's case against Kik presents an opportunity to try to apply limits, in the digital asset sale context, to the so-called “Howey” test, an over 70 year old test used to determine whether an investment contract (and, hence, a security) exists.
Not everyone in the blockchain and crypto space shares that view. Others have expressed – whether publicly, like Coin Center, or more privately – the view that the Kik case very well may turn on questions of fact, rather than questions of law. In other words, that a finder of fact (such as a jury) could determine, based on the facts presented at trial, that Kik may be liable for selling unregistered securities, without the court ever having to address whether Howey (and its case law progeny) is the appropriate test for all digital asset sales – including ones for which the digital tokens sold are immediately usable by purchasers for such tokens' intended consumptive purposes.
While, according to Kik’s Wells Submission, the Kin token currently is integrated and usable on a variety of platforms, including some that are not controlled by Kik, the Kik Complaint alleges that, at the time of both the Kin presale (which was effected via the sale to U.S. accredited investors and non-U.S. purchasers of a Simple Agreement for Future Tokens – commonly called a “SAFT”) and broad public sale, the Kin token was not yet functional.
After reading the Kik Complaint, I reached out to a few of my friends in the U.S. crypto space, including two experienced litigators (Kayvan Sadeghi, a securities litigation partner at Schiff Hardin LLP, and Jake Chervinsky, general counsel of Compound Finance) and three seasoned transactional lawyers (Jay Baris, a partner at Shearman & Sterling LLP, Lewis Cohen, a partner at DLx Law LLP and Joel Telpner, a partner at Sullivan LLP), for their views on some tough questions concerning the Kik case, as well as another high-profile case recently filed in the United States, In re Letitia James v. iFinex Inc., et al. (more commonly referred to as the NY AG's case against Bitfinex).
Important: This article is intended for discussion purposes only and should not be relied upon for any purpose. Nothing in this article constitutes legal advice or investment advice. In addition, it is important to remember that none of the allegations against Kik made in the Kik Complaint or described in this article have been proven. Statements made in this article represent the speaker's personal views and not necessarily those of their employer, clients or any other person or entity.
Topic 1: The Kin ICO as a test case
In 2017, with the Munchee Cease and Desist Order (the “Munchee Order”), the SEC reminded the market that, among other things, “manner of sale” matters when determining whether a sale of digital tokens was the sale of securities. In 2017, Munchee Inc., a California corporation (“Munchee”), launched an initial sale, for fundraising purposes, of a self-described “utility token” that would be used in connection with an app to rank restaurant meals. In the Munchee Order, there was no assertion by the SEC that Munchee had engaged in fraud or a scam offering. Instead, the SEC focused on numerous instances, including statements made on social media and in documentation, in which Munchee had marketed the MUN token in a way that primed purchasers to have a reasonable expectation of profit based solely or primarily on the managerial or entrepreneurial efforts of others.
For a moment, let's hold aside, among other things, questions relating to the Kik SAFT, or the Kik Complaint’s allegations that Kik failed to disclose to purchasers certain information (including financial data and risk factors) that may have been material to a purchase decision.
Question: Could a jury determine, based on facts at trial, that Kik’s alleged statements concerning potential profits (as in Munchee) were enough to demonstrate that Kik sold a security, assuming that the other Howey factors (such as investment of money and common enterprise) were shown to be present? And, in your view, is Kik is a good test case for those in the crypto space who may want to evolve the existing law?
Kayvan:
First, it is important to keep in mind that cases like this rarely go to trial and when they do it can take years to get there. I would not bet on this case going to trial, but if it did, the alleged statements from Kik’s CEO could prove very impactful to a jury in finding that investors were led to expect potential profits based on future efforts of the CEO and his team at Kik. However, it is not clear from the Kik Complaint whether those statements were made only in the context of presenting to accredited potential SAFT investors, as opposed to the general public, and Kik may argue that distinction matters.
The Kik offering is a difficult test case because it involved a fundraising ICO with tokens for an Ecosystem that was not functional at the time of the offering. That is a pretty direct assault on the Howey test. Even if a court is persuaded that the Howey test needs updating, it may feel constrained to follow the Supreme Court and find it difficult to distinguish Howey on these facts.
To evolve the law, edge cases—such as projects with a functional system in place before the offering, or who distributed a token without using it for fundraising—might shed more light on the line between security and non-security. Those edge case could make it easier for courts to distinguish and limit the reach of Howey, rather than squarely rejecting it.”
Jay:
The SEC drew a line in the sand when it announced that it would apply the Howey test to determine whether a particular token, in a particular offering, is a security for purposes of the federal securities laws. The expectation of a profit from the efforts of others is a clear part of that test. When the issuer cites potential profits as a reason to buy the token, it bumps into the four corners of the Howey test. The issuer’s real beef is not that it passes the Howey test, but that it doesn’t think the Howey test is the correct approach. For now, that is an uphill battle.”
Jake:
Kik's statements concerning potential profits should not alone suffice to prove that Kik sold a security. Those statements may help the SEC show that Kin purchasers expected profits, but they don't prove that purchasers expected specifically from Kik's managerial efforts -- an entirely separate prong under the Howey test. As Kik argued in its Wells response, if Kin purchasers expected profits based on the efforts of a diverse group of entrepreneurs and developers rather than Kik alone, then the Howey test cannot be satisfied. Kik will likely press this argument in the litigation, and if its Wells response is any indication, there are plenty of other statements on the record to support the point.”
Joel:
One of the things that makes applying the Howey test difficult in reality is that the “expectation of profit” prong is by definition subjective. Courts cannot see into the minds of purchaser to know whether the purchase decision was driven by an expectation of profit. So courts instead must look for objective factors. The extent to which a seller may have “primed the market” with statements regarding future profits to create such expectations is the type of objective factor courts have historically looked at when finding that an expectation of profits existed. Unless as a legislative matter, we decide that the Howey test should no longer apply to token sales, I believe it is impossible to ignore the statements made by Kik’s CEO.”
Topic 2: Is the Kin token itself a security?
Paragraph 91 of the Kik Complaint appears to make clear the SEC's view that, not only was the sale of the SAFT the sale of a security, but that the underlying Kin tokens sold pursuant to the SAFT also were securities.
Paragraph 91 says,
91. Although Kik’s SAFT specifically stated that the SAFT was itself a security, it failed to state that the Kin to be delivered under the SAFT were securities sold pursuant to the SAFTs. And although Kik’s PPM claimed that the offer and sale of the SAFTs were subject to an exemption from registration under Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder, among other United States laws, Kik did not claim any exemption for the offer and sale of Kin through the SAFT. As such, Kik’s offer and sale of the SAFTs and Kik’s offer and sale of the Kin purchased under the SAFTs were not registered.”
In the Kik Complaint, the SEC also alleges, among other things, that the Kin presale should be integrated with the Kin public sale. The Kin public sale reportedly followed soon after the Kin presale – and Kik allegedly was contractually required by the terms of the SAFTs to launch the Kin public sale by a particular date. In addition, according to the Kik Complaint, the Kin tokens sold under the SAFTs allegedly were identical to, and fungible with, the Kin tokens sold in the public sale, and, allegedly, none of such tokens could be used for their intended consumptive purchase at the time of initial sale. While the Kik Complaint alleges that, pursuant to the terms of the SAFT, SAFT purchasers had certain restrictions on the timing of a portion of the Kin tokens purchased by them, the Kin tokens themselves allegedly were not subject to any transfer restrictions and, presumably, Kik had not programmed into the applicable smart contracts any transfer restrictions.
Members of the SEC staff previously have indicated that digital asset sales, including token sales made pursuant to SAFTs, should be evaluated on a case-by-case, facts-specific basis.
Traditionally, those promoting sales of tokens via SAFTs characterized the sale of the SAFT itself as the sale of a security. However, the release of the underlying tokens typically were not contemplated to take place until such tokens were fully functional with their intended platform or ecosystem, at which time, SAFT proponents believed, such functional digital token would be less likely to constitute a security. In a sense, the SAFT Whitepaper conceived of the sale of a token pursuant to a SAFT as a bifurcated process: first, the sale of the SAFT, a self-described security, and, second, the release of a functional digital token that would not be a security.
While some have criticized the SAFT concept, it is not necessary to debate it here. In the case of the Kin token, according to the Kik Complaint's allegations, Kik did not wait until the Kin token was functional before releasing it. For that reason, presumably, it is unnecessary to determine whether the SAFT “process” could have worked had the Kin token been fully functional at the moment of its initial delivery to SAFT purchasers.
Question: In your view, what is the significance of Paragraph 91? Does it suggest that the SEC views present-day transactions involving Kin as transactions involving securities?
Kayvan:
Paragraph 91 of the Kik Complaint indicates the SEC viewed the Kin token itself as a security, at least at the time of the offering. It is less clear whether the SEC views every transaction using a Kin token as a securities transaction today.
The Kik Complaint does not include any allegations or causes of action directed at current use of the Kin token. Kik’s press release responding to the complaint argues that ‘the SEC's decision not to bring such claims acknowledges that the transactions currently taking place within the Kin Ecosystem do not fall under the federal securities laws.’ While it may not be an acknowledgement, the SEC’s decision not to bring any claims beyond the initial offering does reflect real hesitance by the SEC to take on the issue of whether a token that operates like Kin today is a security. Kik may have opportunities through the litigation to force the SEC to clarify its position on that issue, and it will be interesting to see how the SEC walks that line.”
Lewis:
I find it interesting that the sole reference in the entire Kik complaint to the Kin token itself being a 'security' under US law comes only indirectly in a allegation that Kik 'failed to state that the Kin to be delivered under the SAFT were securities sold pursuant to the SAFTs' (emphasis added). That a direct allegation that 'the Kin token is a security' does not otherwise appear in the Kik Complaint – particularly, in the 'Conclusion' section – may suggest that this is not a point the SEC want to test, at least in this litigation. The reminder of the references to Section 5 violation refer to 'the offer and sale of Kin.'
Why is this significant? In those references in the complaint, we can easily substitute for 'Kin tokens' any of the other assets which in the past have been objects of an investment contract but which are self-evidently themselves not 'securities,' such as the whiskey in the Glen-Arden Commodities case, the bank certificates of deposit in Gary Plastic or the beavers, chinchillas or silver foxes in the 'animal' cases. This would support a conclusion that it was the investment contracts representing an 'offer and sale' of an asset that was the 'security' – not the asset itself. To be clear – that is not the wider position the SEC are taking but it is notable that they don’t seem to want to litigate this issue here.”
Joel:
The real question is somewhat a philosophical one: If I enter into a contract to prepay for a good or service to be delivered to me in the future, if that future good or service is not a security, why should the contract to purchase that good or service be treated as an investment contract and, thus, a security? To buy a Tesla, a purchaser must enter into a contract, make a prepayment and wait for the Tesla to be built. No one believes in this case that the Tesla is a security--it’s a car--and as far as I know, no one would treat the contract to buy the Tesla as an investment contract. Therefore, this raises an important question. If, as Kik maintained, the Kin is not and was never intended to be treated as a security, then why did they treat the contract that purchasers entered into to prepay for Kin as an investment contract? They sold an investment contract, thus a security, that they intended to convert into a non-security. There is nothing wrong with this conceptually. If when purchasers entered into contracts to buy Teslas there was no factory and Teslas were merely a vision on Elon Musk’s drawing board, under current law, those purchase contracts might very well be considered to be investment contracts because purchasers in that instance would be taking a risk on Musk to actually build, not simply their car, but the enterprise itself. Nevertheless, the cars when ultimately delivered would not be securities.
So why is this not the same with Kin? Kin were delivered to purchasers before they could be used for their intended purpose. It would be the equivalent of Tesla delivering to purchasers the key to their future car before the car itself was completed and telling purchasers that they can either hold their key and wait for the car to be built or they can sell their key to someone else for a profit on a secondary market. In this scenario, Teslas are still not cars but the keys that are being traded may very well constitute investment contracts.”
Question: Does Paragraph 91 suggest that all token sellers who sell tokens pursuant to a SAFT (which is a self-described security) should limit transferability of the underlying tokens to only the same universe of purchasers (such as U.S. accredited investors or non-U.S. persons) who purchased the SAFT itself – in other words, should tokens sold pursuant to SAFTs be structured as a different “class” of tokens (i.e., not fungible with tokens sold pursuant to a public sale)? Should token sellers who sold SAFTs obtain SEC assurance that their tokens have morphed into non-securities before releasing such tokens, if such tokens will be salable to, or otherwise fungible with tokens sold to, retail or “Main Street” purchasers?
Kayvan:
It would be nice to get assurance from the SEC but it is not clear how realistic that is for most projects. The first and only ‘no action’ letter I am aware of so far involved a project that was so clearly not a security that no letter should have been necessary. That said, the complaint against Kik makes pretty clear that the SEC is very likely to view any unrestricted tokens sold pursuant to a SAFT as securities that should be subject to the same restrictions.
In the current environment, many projects may have good reason to consider alternatives that do not involve using the same token for fundraising and for subsequent platform functionality.”
Lewis:
I agree with Kayvan on this. It is very difficult to extrapolate from the SEC’s position in the Kik compliant how they would look at other situations. The best approach in most cases will be to talk with the Staff before undertaking any significant activity in the U.S. with tokens.”
Joel:
This definitely gets into the so-called morphing question. Had Kik waited to release tokens until the point that they were fully useable, the outcome might have been different. However, it is important to remember that the SEC’s recent “Framework” identified a number of other factors that would need to be satisfied in determining when a digital asset that was considered to be a security when sold will no longer be treated as such. The SEC might take the view that Kik is an “active participant” and as a result, Kin continue to be securities.”
Topic 3: Did Kik have sufficient notice of applicable law, and does it matter?
The Kik Complaint alleges that Kik had sufficient notice that the Kin sale was likely to be the sale of a security because, among other things, in July 2017, the SEC released its 21A Report of Investigation concerning The DAO (“The DAO Report”).
Indeed, at least one court (in the RECoin/Diamond case, U.S. v. Maksim Zaslavskiy) previously has determined that, based on The DAO Report and other public statements by the SEC and its staff, the defendant had received constitutionally sufficient notice about the applicability of U.S. federal securities laws to digital token sales, explaining:
[T]he abundance of caselaw interpreting and applying Howey at all levels of the judiciary, as well as related guidance issued by the SEC as to the scope of its regulatory authority and enforcement power, provide all the notice that is constitutionally required.”
In addition, the Kik Complaint alleges that Canadian securities regulator, the Ontario Securities Commission (the “OSC”), already had informed Kik that the Kin sale would be viewed as a sale of securities under Canadian law. The Canadian test for whether an investment contracts exists, articulated in the seminal case, Pacific Coast Coin, is very similar to the Howey test. In addition, the Kik complaint alleges that a “consultant” had cautioned Kik that the Kin token sale could be the sale of a security, if sold to U.S. persons.
Question: In your view, should Kik have been aware that its sale of the Kin token was likely to be the sale of a security? How much weight should be given to the alleged guidance provided by the OSC or a consultant? Does it matter that the Munchee Order, addressing manner of sale in the so-called “utility token” context, came after the Kin sale was completed, or should token sellers and their counsel have been aware of the line of cases that came after Howey?
Kayvan:
As a legal matter, I do not think that the allegations about the consultant carry much weight. The cause of action for failure to register does not have an intent requirement and the argument that the securities laws are unconstitutionally vague would be a hard one to win.
Those allegations may be intended to blunt criticism of the SEC. It is unfortunate that this high-profile test involves a Canadian company that started its offering before the SEC issued any guidance. It lends credence to industry criticism that you can’t take any action in the United States for fear that it might conflict with future guidance, and if you can’t change course when that happens the SEC will try to put you out of business.
The SEC seems to be making the point that people in the industry were well aware of a risk that tokens might be classified as securities before the SEC put out The DAO Report, as you, I, and others in the space at the time are well aware.
However, the SEC has not so far taken a draconian stance. It is hard to draw any conclusions without knowing the details of any settlement discussions between Kik and the SEC. This may not have been the SEC’s preferred course of action, and Kik’s approach may have left them little choice but to sue.
The Complaint attacks Kik far more than was necessary to state the claims. For example, the SEC goes out of its way to allege that Kik was warned that its initial coin offering (“ICO”) may be a securities offering even though this is not a fraud case and Kik’s intent is not an element of the claims. The SEC may be trying to blunt any criticism that it is unfair to go after a project that started its offering before the SEC issued guidance.
It will be interesting to see whether the case results in publicizing any of the legal guidance Kik received. While that advice is generally privileged, Kik could seek to waive privilege over certain subjects to use that legal advice affirmatively.”
Jake:
The SEC has often implied that The DAO Report sufficiently informed the crypto industry that token sales might qualify as securities issuances. However, while the Report did consider the application of the Howey test to public token sales, its high-level analysis provided very few details for future projects to use in determining whether their own activities might come under the SEC's jurisdiction. Because of the unique facts and circumstances surrounding each token issuance and the novelty of treating a digital token as a security, The DAO Report did not adequately clarify how the SEC would later view the interplay between ICOs and the federal securities laws.”
Jay:
The DAO Report put the world on notice that it was looking closely at whether particular tokens would be securities for purposes of the U.S. securities laws. While The DAO Report, by itself, is not dispositive of the status of a token going forward, any token issuer was on notice of the potential risks of proceeding with an ICO under the assumption that the token is not a security.”
Joel:
The facts in The DAO Report are distinguishable. According to written materials prepared by Slock.it, it was intended that The DAO would earn profits by funding projects with the proceeds received from selling the Slock.it Tokens and would, in exchange, provide Slock.it Token holders a return on their investment. It is not surprising that the Slock.it Tokens were considered by the SEC to be investment contracts. Kin do not operate in a comparable way.
However, both The DAO Report and the Munchee Report did provide important warnings that perhaps Kik should have heeded that the manner of sale is important. As we discussed above, creating an expectation of profit in the marketplace is an important factor in determining the existence of an investment contract."
Topic 4: What should the crypto market expect next?
Question: Do you anticipate that the Kik case will be resolved quickly, or do you think that the industry will be watching this case for years to come? For non-litigators (including this author), can you describe what is likely to happen next, from a procedural perspective?
Kayvan:
The SEC v Kik Interactive case may set crucial precedent someday, but do not expect any rapid developments.
The road to trial is long, risky, and very expensive. Companies rarely go the distance against the SEC and it is still likely that Kik will settle along the way. If Kik is really set on getting rid of Howey, that will require a trip to the Supreme Court that would be years in the making.
Normally in a case like this we would expect Kik to file a motion to dismiss arguing that the complaint fails as a matter of law even if you accept the factual allegations as true. It would be months before the court heard argument on the motion and it could easily be 2020 before a decision. If that motion is denied, a trial could be years away.
Of course, this is not a normal case. Normally companies do not publicize their Wells submissions, raise a defense fund, and goad the SEC into suing them.
Kik is defending this case in the press as much as the courts. Kik will probably still file a motion to dismiss but may use the opportunity to tell its side of the story more than we typically see.”
Joel:
Regardless of the outcome with Kik, it is important to remember that the SEC’s Framework was published subsequent to the date that Kin was sold. Over time, assuming there is no intervening Congressional action, we are likely to have further clarity as to when and how a digital asset that is treated as security when first sold can evolve so that it is no longer considered to continue to be a security. Among other things, we may very well have additional SEC guidance or no-action precedents that we can utilize. So unless we get a court outcome that has the effect of throwing out the Howey test in the context of the sale of digital assets, I don’t believe we should give too much weight to what is happening with Kik. The Kik situation is being played out in a very public way that will force both sides to dig in their heels. As a result, one side is likely to be unhappy with whatever the ultimate outcome is. However, we should be cautious in assuming that whatever that outcome is becomes an all-encompassing precedent for other digital asset sales.”
Question: Is litigation against the SEC similar to, or different from, private securities litigation?
Kayvan:
There are some similarities but a lot of very important differences.
Litigating against the SEC is in some ways the opposite of private securities litigation. In private securities litigation, the burden of discovery falls on defendants. But, here, Kik would have produced most relevant documents during the SEC’s investigation. Now the tables are turned, and Kik has the opportunity to seek discovery from the SEC. That may present opportunities to force the SEC to clarify its position on key issues early in the case.”
Question: Which high-profile case do you think will have a greater legal impact on the crypto space in the near term, SEC v. Kik, or the NY AG's case against Bitfinex, Tether and others – or do you think that it likely will be a draw?
Jake:
In the near term, the Bitfinex matter will likely have a greater impact on the crypto space. For better or worse, Bitfinex has become a systemically important company, serving as one of the largest fiat on-ramps outside of the United States and as the issuer of the the most-used stablecoin in the industry. Yet, the company is also widely suspected of engaging in improper conduct that could have significant implications for global crypto markets. The NY AG's effort to reveal that conduct should be top-of-mind for anyone with a stake in the crypto industry."
Kayvan:
While everyone is focused on the Kik case, the NY AG’s proceeding against Bitfinex may be more consequential, especially in the near term.
It is quite possible that the court in the Kik case will deny a motion to dismiss without breaking any new ground legally, and any eventual change in the law based on the Kik case could be years away.
The NY AG case against Bitfinex, however, is slated for argument in July on a motion that raises threshold questions about the scope of the NY AG’s territorial and subject matter jurisdiction over crypto companies. That case could have a real impact the scope of NY AG investigations in the near future.
Bitfinex and tether are also challenging the definitions of securities and commodities in the context of a stablecoin, which presents more of an edge case than Kik’s fundraising ICO. It is a state court, so it will not have the same force nationally as a federal court decision, but it is a well-funded case and could generate decisions soon that quickly rise to appellate courts.”
Joel:
I disagree on this one. To a certain extent, the Bitfinex/Tether situation revolves less on questions as to the definition of securities and commodities and instead on questions of contract law and potentially fraud. If Tether promised purchasers (including those located in New York) that Tether would always be backed one-for-one by a dollar but that wasn’t true, the NY AG would have a legitimate basis to potentially pursue a claim against Bitfinex and Tether. The outcome with respect to Kik can have a much further reaching impact on the entire digital asset market.”
Question: What final predictions, questions or thoughts concerning the Kik or Bitfinex cases would you like to share?
Joel:
The market is going to continue to push the SEC for additional guidance and clarity regarding the sale of digital assets beyond what we have already received. The possibility of Congressional action is also likely to increase. Therefore, barring an unlikely judicial outcome that narrows or eliminates the applicability of the Howey test to digital asset sales, the ultimate Kik outcome is not likely to have as much of an impact on the market as will come from additional SEC guidance and future no-action letters.
As we have discussed, there are facts in the Kik case that are unique to Kik and that may not have that much relevance on other future situations. Additionally, we are seeing a growing trend of attempts in the market to better separate token sales that are intended to be used for raising capital from those tokens that are sold following the completion of the capital raise and the launch of a platform for consumptive purposes.”
Kayvan:
People should not get their hopes up that these early cases will do much to shift the law anytime soon. The judge in the Bitfinex case has seemed hesitant to directly take on the definition of a security, and the federal court in the Kik case may also steer clear of disrupting the law if at all possible.
Finally, I hope everyone will appreciate good lawyering on both sides of these cases. Many of us have good friends and former colleagues at the SEC, the NY AG’s office, and on the bench. Fighting aggressively, but respectfully, is one of the best aspects of our profession. It is an art that I hope and expect will be on display in these cases and could serve as a model for the broader industry dialogue around these issues.”
Lewis:
As a non-litigator, my main concern is how this case will impact other projects moving forward. I would agree with Kayvan that a settlement appears likely as it is probably in the best interest of both sides.
What I would like to see is a court looking closely at the facts and concluding that an 'investment contract' that involves a sale of a token may well constitute a 'security' without the token itself necessarily also separately being considered a 'security.'”
For now, the blockchain and crypto market will have to wait and see. But, judging by the many Tweets, LinkedIn posts and other content pieces produced in the past week, that waiting is unlikely to be quiet.
