Debevoise & Plimpton Discusses SEC View of Blockchain Tokens as Securities

On July 25, 2017, the Securities and Exchange Commission (“SEC”) Division of Enforcement issued a report of investigation under Section 21(a) (the “Report”) concluding that blockchain tokens sold by The DAO (“DAO Tokens”) were securities as defined under relevant law. These blockchain tokens are analyzed under the so-called Howey[1] test, and the SEC found that DAO Tokens allowed the holders to profit from the efforts of others, a key element of that test. We labeled a blockchain token that meets the definition of security a “security token” in our memorandum that accompanied “A Securities Law Framework Read more