U.S. securities and exchange Commission SEC sent a precedent letter used for the classification of ICO-Token as the value of paper

Home News U.S. securities and exchange Commission SEC sent a precedent letter used for the classification of ICO-Token as the value of paper

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Marcus Misiak –
04.04.2019

The U.S. Securities and Exchange Commission yesterday issued their first letter in which they assured investors during an Initial Coin Offering (ICO) that it is in the Token to any securities within the meaning of the American Put. The letter can be regarded as a precedent for the crypto scene.

The company has received the letter, which is referred to as a “No Action Letter”, is a TurnKey Jets, a Startup company, a private jet services, including flight crew and pilots. The Letter States that the SEC has analyzed the crypto-Token, the business plan of the company’s TurnKey Jets and has determined that the Digital Asset is not securities, and no SEC rules violated.

Turnkey Jets says that it will not use funds from the sale of its Token for the development of its platform, and “at the time of the sale of its digital Assets, the seller will have a fully functional network”. By the output of a “Utility-Tokens” in contrast to a securities-Turnkey is not subject to be Jets, the rules of the SEC.

The SEC’s Director of Corporation Bill Hinman said Forbes, that the “No Action”letter can serve as a template for other companies with cryptographic ambitions, the “convey a good idea of how the SEC staff will consider the issue and deal”.

The “No Action Letter” contains six key points in connection with TurnKey Jets. In particular, the company has promised to use any funds from the Token sale for the development of its platform, its network and its applications, each of which is fully developed and will be ready for use when the tokens are sold. In addition, the Token immediately to the purchase of private jet Services, suitable, as soon as they are sold and have a fixed price of one U.S. Dollar.

Another important aspect is thus that the Token offer no profit potential, and no shares of the company. The Token can not be transferred, but only in the TJK Wallets themselves are tradable, but not outside of the platform (via a third-party provider, such as a stock exchange).

In a 13-page document, which was also released yesterday and the “Framework for ‘Investment Contract’ Analysis of Digital Assets” will be called, explained to the SEC in detail, such as the “Howey Test” to crypto-currencies is applied, is used to determine what is a value of paper. Herzuheben is, in particular, the Passage where the SEC describes the 12 characteristics that, if they exist, mean that the token offer is less likely to pass the Howey Test. The first two are crucial. “The distributed Ledger network and Digital Asset are fully developed and ready for use”, and “the owner of the Digital Asset are immediately able to use it for the intended functionality in the network, especially if there are built-in incentives to promote such use”.

The full letter from the SEC you can find here.

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