In an open letter to the SEC via Facebook, venture capitalist and cryptocurrency investor Tim Draper spoke about the recent SEC decision regarding DAO tokens as securities.
Draper offered a series of comments regarding the nature of ICOs and the reasons why the SEC decision were preemptory and too far-reaching. Draper specifically stated his desire that tokens issued prior to October 30 of this year be grandfathered in as non security instruments. This would obviously include his own ICO of Bancor, which, he argues, would inspire a sense of innovation in a land of opportunity.
He did, however, agree that there should be some regulation, albeit light, on the sale of coins to investors, which had been suggested by a number of other investment groups prior to the SEC announcement.
In a spirit of clarity, Draper suggested a series of guidelines to manage the status of tokens as securities.
1. If the purpose of a token is for investment, it must register with the SEC.
2. If the purpose of a token is for societal transformation, and all proceeds go to the support and development of the token, it need not register.
3. If the purpose of a token is to raise money for a company, and the money is used to support the company, it must register with the SEC.