SEC explains why the five representatives of MATIC, MANA, CHZ, SAND, and LUNA are securities

This site (120bTC.coM): WuBlockchain reported that in last month’s U.S. Securities and Exchange Commission (SEC) case against Ethereum software provider Consensys, it accused its MetaMask wallet of acting as an unregistered broker and promoting a large number of unregistered transactions. Sales of Securities. The SEC also once again detailed some of the cryptocurrencies that meet the definition of securities.

SEC v. Consensys: MetaMask Swap traded a large number of unregistered securities

Last month, MetaMask provided a "Swap" service for users to directly trade digital assets, and was accused by the SEC of assisting in the transaction of unregistered securities and profiting from it. : Consensys has facilitated more than 36 million crypto transactions through MetaMask in the past four years, of which "at least 5 million" involved crypto asset securities.

The mentioned cryptocurrencies include AMP, AXS, CHZ, COTI, FLOW, MANA, MATIC, NEXO, SAND and LUNA, etc., as well as the initial coin offering (ICO) that was just ruled by a US judge this month. BNB does involve unregistered securities issuances.

The following lists five of the cryptocurrencies and provides detailed explanations for them.

MATIC

As the native token of the Ethereum expansion platform Polygon, the SEC charged:

• MATIC has token incentives: the white paper writes that token holders can obtain additional income through staking; founder It has also been stated that MATIC tokens serve as "economic incentives" for the Polygon network, giving users more motivation to participate in the Polygon ecosystem.

• Investors can reasonably expect profits: the tokens have a destruction mechanism; and Polygon has also publicly stated the purpose of fundraising, which will be used to strengthen the Polygon ecosystem and make Ethereum lead other public chains.

• The team is trying to guide investors to buy MATIC: Polygon officials frequently update financial indicators such as its network growth and development status; publicize information about tokens being listed on exchanges; team members have also repeatedly promoted the amazing growth of the Polygon network.

• Involving pre-mining: The official reserves a large number of tokens, about 67% of MATIC is used to support the ecosystem, and 20% is owned by the team and consultants.

Polygon founder Sandeep Nailwal talks about currency prices

As early as last year, Polygon Labs had already responded to the above accusations.

MANA

As the native token of the Ethereum virtual reality platform Decentraland, the SEC charged:

• The protocol has incentives: Decentraland holds art, game and application creation competitions to provide new and old users with token-based Incentives claimed to promote network development.

• Investors can reasonably expect profits: the token has an adjustable supply and demand mechanism; Decentraland has also publicly stated the purpose of fundraising, which will be used for the platform’s marketing and business expenses, emphasizing that the development budget will focus on improving the user’s browsing experience.

• The team is trying to guide investors to buy MANA: Decentraland often emphasizes its development plans through white papers and public statements, and guides investors to consider MANA as an investment tool.

• Involving pre-mining: The official reserves a large number of tokens, 20% will be given to the development team, consultants and early contributors, while 20% will be given to the foundation.

CHZ

As the native token of Chiliz, a sports and entertainment ecosystem, SEC charges:

• Investors can reasonably expect profits: the token has a regular transaction fee income destruction mechanism; Chiliz has also publicly stated the purpose of fundraising , will be used to fund the development, marketing, business operations and growth of the Chiliz protocol; Chiliz strongly emphasizes the experience of the leadership team.

• The team has destiny (interest) alignment with investors: the team warned in the white paper that "price fluctuations in BTC, ETH or ChZ may prevent the company from continuing development to the necessary extent or maintaining the Socios platform in the expected manner. ”.

• The team is trying to guide investors to buy CHZ: The team has publicly stated that as Chiliz reaches cooperation with more teams, the value of the related "FanToken" will increase, and the value of CHZ will also increase.

• Involving pre-mining: The official reserves part of the tokens, about 5% is allocated to the development team, and 3% is given to the advisory committee.

SAND

As the native token of The Sandbox, a virtual gaming experience, SEC charges:

• Investors can reasonably expect profits: the token has a controllable supply and demand mechanism; The Sandbox has publicly stated the purpose of fundraising, It will be used for development, promotion of the platform, legal compliance, etc.; The Sandbox has also highly praised the rich experience of the leadership team, emphasizing that it can complete the future vision together with a strong product roadmap.

• The team is trying to guide investors to buy SAND: The Sandbox has promoted the listing of tokens on exchanges; investors and team members have publicly criticized The Sandbox’s success and future development many times.

• Involving pre-mining: The official reserves a large number of tokens, 19% will be given to the founders and development team, and 25.8% will be allocated to the company’s reserves.

LUNA

As the native token of stablecoin payment platform Terra, SEC charges:

• Investors can reasonably expect profits: Founder Do Kwon has publicly stated the purpose of fundraising, which will be used to fund operations and help Establish and expand the Terra ecosystem; the website also promotes the expertise of its development team, claiming that Terraform is led by "serial entrepreneurs."

• The team is trying to guide investors to buy LUNA: team members have talked about its token many times on social media and public interviews, claiming that LUNA is an "equity" in the company, and emphasizing that LUNA grows as the ecosystem grows The future is promising.

• Involving pre-mining: It is said that both Terraform Labs and DoKwon have reserved hundreds of millions of LUNA tokens for themselves.

Summary of the SEC’s securities determination basis

It is almost the same as the previous description. Most of the SEC still summarizes and determines based on the following principles:

• Whether investors have reasonable expected profits from the tokens: Team Design Deflation or supply mechanism, whether it has publicly stated its development plan and strong team background

• Whether the token is an incentive for investors to participate in the ecosystem: whether the protocol has incentives or reward mechanisms, whether the team has publicly stated its fundraising purpose or Purpose

• Whether the team has reserved tokens: whether the founder, development team or foundation involves pre-mining or self-retention in the distribution of tokens

Generally speaking, only the first characteristic is sufficient There may be charges related to the Howey Test's definition of securities, and other teams' descriptions of the tokens will further strengthen the possibility of being charged.

However, this seems to be inconsistent with the views of the Chairman of the U.S. Futures Trading Commission (CFTC), who claimed that up to 70 to 80% of cryptocurrencies, including BTC and ETH, do not fall into the category of securities.

The above is the detailed content of SEC explains why the five representatives of MATIC, MANA, CHZ, SAND, and LUNA are securities. For more information, please follow other related articles on the PHP Chinese website!