In an open letter to the SEC via Facebook, venture capitalist Tim Draper spoke about the recent SEC decision regarding DAO tokens as securities.
In an open letter to the SEC via Facebook, venture capitalist Tim Draper spoke about the recent SEC decision regarding DAO tokens as securities.
Draper’s View
Draper offered a series of comments regarding the nature of ICOs and the reasons why the SEC decision was preemptory and too far-reaching. Draper specifically stated his desire that tokens issued prior to October 30 of this year be grandfathered in as non-security instruments. This would obviously include his own ICO of Bancor, which, he argues, would inspire a sense of innovation in a land of opportunity.
Some Regulation
He did, however, agree that there should be some regulation, albeit light, on the sale of coins to investors. The same had been suggested by a number of other investment groups prior to the SEC announcement.
In a spirit of clarity, Draper suggested a series of guidelines to manage the status of tokens as securities.
1. If the purpose of a token is for investment, it must register with the SEC.
2. If the purpose of a token is for societal transformation, and all proceeds go to the support and development of the token, it need not register.
3. If the purpose of a token is to raise money for a company, and the money is used to support the company, it must register with the SEC.
