Q: Have a question about cryptocurrency.
I just started working on a disruptive token to introduce in the crytpo space platforms in relation to the social & retail service settings. I'm in the U.S. and I am aware of the stringent regulations surrounding the issue of whether or not a token is considered a security. My token involves a proof of work and proof of service concept. Its value will be gained when a person performs an action, and when they do they will receive my tokens for free and then they have the right to give this token to the recipient they deem worthy of it, like giving someone a tip. Is this considered a security? Also, if I wanted further exposure and decide to just put this token on the exchange without doing an ICO or any type of outside funding sort of like the (Doge) would it be considered a security then?
A: Refer to the Howey Test, which is the most prominently used characteristics applied to analyze whether a debt or equity security exists. If you are still unsure, I would recommend obtaining counsel who is familiar with securities law. Remember, securities law is a federal issue for the most part, so you don’t necessarily need to obtain counsel in your state to assist you with this matter. Also, note that blue sky laws apply if your coin is considered a security.
Hope this helps,
Carl G. Hawkins
Jacksonville Legal Team®
Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.