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RE: Explainer: Value Flows on Steem with SMTs [VIDEO]

in #steem7 years ago

TL;DR: SMTs that are offered by existing companies for accessing or using existing services use are likely safe from SEC regulation.


The Security Act of 1933, which establishes the definition a security, states:

The term ‘‘security’’ means:

any note, stock, treasury stock, security future, security-based swap, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a ‘‘security’’, or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing.


The common theme in these definitions is that people purchase a security with the expectation of a return on their investment.

What complicates or, in our case, protects SMTs from SEC regulation is the fact that SMTs, like Steem tokens, has a utility function, meaning it is needed in order to use Steemit or any other application on the Steem blockchain.


Sources:
How to execute an ICO in the United States - @blockmason
SEC Investigative Report


Disclaimer: Not a lawyer.