Primalbase crowdsale ends after one day and over 3,000 BTC raised!
Guy Brandon
71

Congratulations on the completion of your ICO. I’m working on our own ICO launch.

I noticed on http://www.primalbase.com that your company has a location in New York. Because of the New York location, you’re subject to the U.S. SEC jurisdiction.

The U.S. Securities and Exchange Commission defines an investment contract in its case law of SEC v Howey.

The US Supreme Court case of SEC v Howey established the test for whether an arrangement involves an investment contract. An investment contract is a type of security. In the context of blockchain tokens, the Howey test can be expressed as three independent elements (the third element encompasses both the third and fourth prongs of the traditional Howey test). All three elements must be met in order for a token to be a security. 1. An investment of money 2. in a common enterprise 3. with an expectation of profits predominantly from the efforts of others.

Because your token has a promise for unlimited access to shared space and office space for token holders, it’s an economic benefit which fills the expectation of profits prong.

The SEC may not have regulations on a cryptocurrency itself but it does have jurisdiction over transactions that meet the definition of an investment contract. How has your company gotten around this SEC case?

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