RE: BLOODY IMPORTANT QUESTION: should we consider STEEM-ENGINE tokens a security or utility?
Respectfully, I strongly disagree with your application of the Howey test.
Is it an investment of money? (This very much depends on what you think STEEM is. I think it's reasonable to argue "No" here.)
Each coin and token is being treated by the various departments (SEC, FinCEN etc.) differently depending on how the coin or token is used. It doesn't matter how you or I view STEEM, it matters how the governmental department we are dealing with views it.
STEEM is used like money on a daily basis. STEEM is used to buy and sell things and on Steem Engine it is not SBD that is used but STEEM to buy and sell tokens. It is most certainly being treated as a "virtual currency" according to FinCEN.
Is there an expectation of profits? (The S-E tribe coins can very easily argue "No" here by saying "It's an expectation of influence in an ecosystem")
This is shaky ground. I really don't know what to say on this one. There are lots of ways to buy "influence" on a network that does not result in you earning anything. That is not how the reward pool/inflationary model works exactly. While it is true that it does have the utility of providing increased visibility to you via self-voting, which is often looked down upon in the community, the cost vs. visibility ratio is terrible.
Additionally, it cannot be ignored that investment terms and suggestive concepts related to investing is all over the place on the Steem blockchain and the Steem Engine platform. Terms like "staking", "vesting shares" do appear like financial terms speaking to the investor mindset.
The Proof of Brain approach of "mining" for coins by curating content is not in itself any indication that a coin must be a security. And token sales make logical sense even by a project that is centralized so long as the token has an essential function for the product/service or ecosystem. However, arguing that "influence" is the utility of the token very much depends on how that token provides utility.
For a token to not be a security it needs to be a utility token, commodity or currency. If it is a currency then you must familiarize yourself with FinCEN and other currency managing departments and their policies. If it is a utility token that use of the token needs to be essential and its use in the ecosystem or product/service needs to be clearly conveyed.
Is success predicated on the efforts of others? (Almost all STEEM projects can argue "No" here)
Why can they argue "no" here?
That entirely depends on how the token is structured.
That’s why you have lawyers, bud.
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Yes, having lawyers is nice, but those departments also have lawyers, many. My point is that you are making bold claims that are clearly not accurate. Why do I say that? Because I am familiar with the guidelines and the no-action letter cases by both the SEC and FinCEN.
The response:
Is a poor reply, considering the fact that what you are telling people can most certainly be construed as financial advice. You're playing a dangerous game telling people that STEEM doesn't count as money while FinCEN views cryptocurrencies as convertible virtual currencies.
It is not that I don't want to agree with you, but the problem is that I know that your opinion doesn't match with the positions of these departments. That means you either plan to take the SEC and FinCEN to court in order to establish the appropriate standards like DefendCrypto.org is trying to do now, or you don't mind letting people believe you and get into serious trouble.
I’m not a lawyer and this is not legal advice. It’s pretty clear I’m just offering my opinion about the law, which in the US is open to interpretation and based on precedent. In other words, the whole point of the law is it should be debated. I am looking forward to a new and updated version of Howey from the Supreme Court as it relates to digital assets. But for now, we are using a dull knife to deal with some very specific instances. But it is all that we have in the cupboard.
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Indeed @shanghaipreneur
It's very clear that you're not providing financial advice and you're simply sharing your own knowledge and experience with us.
I absolutelly appreciate it.
Yours
Piotr
Dear @blake.letras
In my own opinion @shanghaipreneur isn't really "telling people". He is simply sharing (in form of comment) his own knowledge within discussed topic. That's very different.
Either anyone here is right or wrong - time will tell.
Yours
Piotr
Wow. What a mindblowing comment @blake.letras :)
Seriously I appreciate your time and effort. One of the best comments I've read in this topic; without any doubt.
Yours
Piotr