ETHNews spoke with attorney Jason Somensatto, who shared his thoughts on the SEC’s latest initial coin offering complaint.
Down goes another ICO! On May 29, 2018, the Securities and Exchange Commission (SEC) announced[1] that it "obtained a court order halting an ongoing fraud involving an initial coin offering that raised as much as $21 million from investors in and outside the U.S." Instead of detailing the alleged scam carried out by Titanium Blockchain Infrastructure Services (TBIS) Inc. and president Michael Alan Stollery, I'd like to reflect on point number 44 within the SEC's complaint.
On Twitter, Jason Somensatto[2], an attorney at law firm Orrick, astutely noted the agency's consideration of the utility token debate:
Note: Screenshot taken from page 11 of the SEC's complaint.[3]
ETHNews tracked down Mr. Somensatto and asked him to elaborate on his insightful commentary.
"At least in one paragraph of the complaint, the SEC appears to be proactively addressing the argument raised by many following the industry, including CFTC Commissioner Quintenz[4], that certain types of tokens may be able to transform from a security into a commodity," he said.
"This idea that a security can transform into some other form of asset is not a concept with much precedence in the law but makes some logical sense in the context of crypto assets," Somensatto explained. "It remains unclear whether the SEC will actually give such an argument credence, as this case will likely not hinge on that issue and the case seems to be a poor vehicle for making such an argument, at least based on the allegations in the complaint."
Regardless, Somensatto said, "If the SEC or a court were to recognize that tokens may be
