brypto

Crypto Twitter is losing its mind over this $4B Pump ICO

Stay Curious // iixii // Head of Crypto at https://www.lazertechnologies.com/  // Prev: CoinDesk, Roc Nation // based @basedevo

ya

the polygon guy is clearly angry - so not gonna comment on that

but chainyoda has a point that peter is ignoring: because token price is decoupled from equity value, buybacks don’t necessarily make a company more valuable

sure, they may pump the token price, but that doesn’t mean value was created by or for the company

this screenshot encapsulates each persons argument in a nutshell imo

chainyoda is focused on the fact that PF isn’t “going public via token sale” bc going public implies equity sale → which implies claim on profits

kris and peter are only focused on “extractive or not” → which really comes down to “will this action pump token price or nah” (bc price up = happy holders)

seems like two entirely different conversations to me

yeah slightly different issues but definitely related

what if % of profits are committed to token buy backs? But i guess that’s still just a promise and not a hard requirement if business conditions change

Just a lawyer behind the curtain of /oz building next-generation gamified storytelling, and making arts more accessible with A Stage Reborn™ for everyone. 💜💙

Often end up so, but with this current administration… 😂 well, people were more scared during blue terms because the SEC had more bite and exchanges were under fire the more securities risk there was. (Lots of tokens got hauled off listings for this, or like when OpenSea delisted collections advertising staking rewards before staking was desecuritized from the statement released this year I think?)

The specific (and public) advertisement of “buy our token we will buy it back which increases value”, even if the result is still lossy, is one of those securities-triggering things.

So you’re saying a token that’s committing to buybacks via profits would definitely be classified as a security offering?

I studied securities law and practiced some as a lawyer! 👀 I learned from my mentors public offering means sale of securities not equity. Classic example is WOTC MTG Alpha cards. 

Technically it’s a public offering. SEC would make them do the work to be compliant and define it as that. 

Equity doesn’t need to be attached, just securities which are situationally defined, and a token absolutely offered like that is a security.

unless it’s enforced in the smart contracts it’s all “trust me bro” at the end of the day

not saying that doesn’t work in the short run, but definitely comes at a cost