Matt Levine’s Money Stuff: When Is a Token Not a Security?

SEC v. crypto exchanges

The US Securities and Exchange Commission began cracking down on crypto in 2017. At the time, there was a vogue for what were called ICOs, initial coin offerings, in which some crypto company or project would raise money by selling crypto tokens to public investors. The ICO promoters — the people behind the crypto project — would put out a white paper describing their project and promising brilliant innovations and huge profits, and they would sell a bunch of tokens for money. There would generally be very little in the way of disclosure or investor rights. For promoters, the ...