STEEM was not issued via ICO. It was mined.
I know, but that is an irrelevant obfuscation of the economic reality that it was intentionally stealth mined noncompetitively so that it would only (~80+%) be issued to the insiders. So then when the insiders sell those tokens, they are issuing investment securities just the same.
Mining their own tokens with no competition is economically equivalent to a pre-mine.
I had already explained that (and make sure you click the links):
But … stealth mined (e.g. Steem) issuance which is intentionally non-competitive, is just an obfuscation of the economic reality that tokens are then sold by this exclusive group to investors as securities because the expectation-of-profit depends on that exclusive group’s ongoing managerial or entrepreneurial duties! Sorry but I just realized that Dan Larimer was likely mistaken and STEEM tokens are probably investment securities.
@ats-david wrote:
Unless they have a definition of ICO that is entirely inconsistent or not actually an ICO (which is entirely possible, given the government), it doesn't appear that it would apply to STEEM.
The economic reality per the 3 requirements of the Howey Test is the definition. Here is what I wrote about that in my blog:
Smoke & mirrors don’t change the economic reality, as I already explained. The Supreme Court stated in the Howey Test decision, that any obfuscations of the economic reality are irrelevant.
Yeah, I read those parts as well. I just think you're explaining the mining and "expectation of profits" incorrectly regarding STEEM. There is no "issuer" of tokens - de facto or otherwise. And there is no expectation of profits from any central issuer of the tokens, partly because there's no issuer.
I think your interpretation is based on what you believe was an "insider" mining scheme, but it can be demonstrated that the mining was in fact opened publicly, even though the pool was small.
I think it would also be hard to prove that any "issuance" took place since the selling of the tokens was via exchanges - not through an explicit ICO process by the creators of the token.
It would really be a stretch to include STEEM in this rule. I'm not saying the state couldn't or wouldn't do it, but they would really need to take the broadest interpretation of the rules in order to do so - if not create additional rules entirely.