Anecdotally, from a practitioner, this one, it makes it increasingly challenging to advise people in the “DeFi” space not to sell a governance token which is almost certainly a security when the SEC appears to be doing little to police this. It doesn’t impact our advice *but* >>

Given the announcement from a US based issuer yesterday that they are issuing a massive number of tokens that appear almost certainly to be investment contracts under Howey, Telegram, and the SEC’s own framework document >>

<< we will surely be hearing more of the same. I appreciate that we don't have telepathy into the SEC's workings, that much goes on behind the scenes, over a long time horizon, but as practitioners you'd make our lives easier if you appeared to be paying attention.

OR >>

<< If DeFI governance tokens are a thing you have concluded as a matter of policy aren't going to be shut down and are fine (which they don't seem to be under the current rubric), please say so.

It's even trickier where one commissioner has come out strongly against >>

<< enforcement in non-fraud token issuances.

The problem that we have is our clients, who come to us for conservative advice and to stay out of trouble, face a competitive disadvantage when you turn a blind eye on rule breakers, and prejudice their ability to fairly compete >>

So, while it's never a Hobson's choice to follow the law, to be sure, and doesn't change how we advise people, it seems unfair in our client's eyes to let someone massively scale by doing a thing that by the book is not OK but where it's a book you don't throw at the competition.

<< I personally don't care and think that the broad sweep of the BSA, OFAC & securities laws, are an impediment to certain technological development. But I also don't want my clients to break the law, face steep fines, imprisonment, private litigation. BUT, the law's the law >>

>> and Clayton and others have said we have an obligation as lawyers to steer our clients in the right direction. We'll continue to do that but if anyone from the SEC is listening ... We could use a little help.

Thanks.

Love,

Palley