Howey Doin?

Part IX - There is a better way

In our previous post, we identified the tension between money crypto and tech crypto and the regulatory challenges it creates. We know how to produce binary outcomes, but binary outcomes work best when the facts and circumstances are such that the tendencies are clear and a binary solution is reasonable. Arguably, that is not the case with crypto. Some are in it only for the money; they are speculating. Others don’t care about that, they are in it for the utility. How many people are on each side? We don’t know. Is the split different for each token? Most likely. Could it also change over time, for the same token? Probably. 

In other words, we are looking at a pretty difficult problem. What we are looking for, then, is a solution that balances innovation and investor protection. Not ‘anything goes,’ and not necessarily an outright ban, either. So, where is the happy medium?

Gathering dust in some law review articles is a solution that we, as a country, have already implemented. It went away with the Securities Act of 1933 and it is time to bring it back.