Well, a week ago we got the news that Kin has also lost to the SEC in court:
Once again, the same analysis applies as with Telegram’s TON. Even though the private presale was done under a Reg D exemption, both cases hinge on the point that there was no “utility” use of the token at the time when the subsequent public sale occurred.
And more generally, the projects intended to use take the same token they pre-sold as a security, and use those same assets as a currency. Intercoin is different in that it separates the underlying ITR asset (which would likely be considered a security by the Howey test) from the community currencies and utility tokens, which can be used in existing economies and pegged to a specific currency.
Here’s the previous analysis. Anything different this time around with Kin?
Being regulated as a security does seem to have a major ancillary benefit. FINCEN has issued a guidance in 2019 which details their exemption from being considered a “money services business”:
The term “money services business” does not include: (a) a bank or foreign bank;
(b) a person registered with, and functionally regulated or examined by, the U.S.
Securities and Exchange Commission (SEC) or the U.S. Commodity Futures Trading
Commission (CFTC), or a foreign financial agency that engages in financial activities
that, if conducted in the United States, would require the foreign financial agency to
be registered with the SEC or CFTC;
Great article @Greg and IMHO, being smart enough and become regulated even before raising funds for Intercoin from investors and respecting the law without any compromise seems to have a major benefit - it’s called TRUST from future investors and users. So, all kudos to you!
And all FINCEN guidance with details of their exemptions are additional benefits for the sake of “sleeping nicely at night”