> I do not agree that pre-selling a purely functional token is necessarily an offering of securities under Howey or otherwise. If the protocol is already specified, and the token has clear utility.
I agree it's not necessarily going to be deemed a security, and I am not a lawyer, but from my reading of Howey and related decisions I would say whether an instrument is deemed a security will come down to how it was marketed and what the general expectation and intent of the purchasers seemed to be. Since Howey emphasizes that only the function of the instrument matters, not the form, I would say that even if a cryptocurrency has use value, it could still be deemed a security if a large fraction of its purchasers mainly expect to achieve a passive profit by buying it. After reading the blog post, I can see why the Colony developers are being cautious
I agree it's not necessarily going to be deemed a security, and I am not a lawyer, but from my reading of Howey and related decisions I would say whether an instrument is deemed a security will come down to how it was marketed and what the general expectation and intent of the purchasers seemed to be. Since Howey emphasizes that only the function of the instrument matters, not the form, I would say that even if a cryptocurrency has use value, it could still be deemed a security if a large fraction of its purchasers mainly expect to achieve a passive profit by buying it. After reading the blog post, I can see why the Colony developers are being cautious