I saw your analogy got downvoted because people didn't like it.
But I've talked with prominent lawyers about this distinction and securities laws are flexible enough to include practically any product in their purview.
The Howey Test isn't the only test that courts and regulators have created.
There are several tests floating amongst the states and various federal circuits, which can and have deemed otherwise benign products and services as things that should be registered as securities with the most onerous costs and distinctions.
A California country club's member fees were deemed securities under one framework.
And every kickstarter and centrally issued product can under other frameworks.
There is nothing wrong with your analogy. The securities regulators generally don't try to stifle all commerce so far.
The idea that all ICOs will experience this form of securities discrimination - just for the mere fact they are using cryptographic hashes and get a lot of revenue/capital - is just as logically unsound.
But they could. Just like almost every product or service could. When they do it will quickly evolve securities law towards a more apt framework. Its not about "securities or not" its about consumer and investor protection, and this is currently the tool available.
I agree, many things which could be deemed securities are not. The SEC's mandate is to protect small investors and public faith in investment markets, and they will hopefully focus their power on instruments where that faith is being challenged.
If they do, the best strategy for an organization raising money through an ICO is to use that money in as transparent and ethical a manner as possible.
But I've talked with prominent lawyers about this distinction and securities laws are flexible enough to include practically any product in their purview.
The Howey Test isn't the only test that courts and regulators have created.
There are several tests floating amongst the states and various federal circuits, which can and have deemed otherwise benign products and services as things that should be registered as securities with the most onerous costs and distinctions.
A California country club's member fees were deemed securities under one framework.
And every kickstarter and centrally issued product can under other frameworks.
There is nothing wrong with your analogy. The securities regulators generally don't try to stifle all commerce so far.
The idea that all ICOs will experience this form of securities discrimination - just for the mere fact they are using cryptographic hashes and get a lot of revenue/capital - is just as logically unsound.
But they could. Just like almost every product or service could. When they do it will quickly evolve securities law towards a more apt framework. Its not about "securities or not" its about consumer and investor protection, and this is currently the tool available.