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3 Corp. & Bus. L.J. 1 (2022)

handle is hein.journals/cablj3 and id is 1 raw text is: CORP. & Bus. L.J. SORRY, THEY WERE ON MUTE: THE SEC'S TOKEN PROPOSAL 2.0 AS BLUEPRINT FOR REGULATORY RESPONSE TO CRYPTOCURRENCY J. Scott Colesanti CONTENTS I. INTRODUCTION: PLENTY IN A NAME................................................................2 A. Crypto's Rough and Tumble Start..............................................................3 B. The Persistently Evasive Definition............................................................5 C. The Leviathan Market Presence .................................................................8 II. BACKGROUND: FROM ORANGE TREES TO DIGITAL TOKENS ...........................9 A. Statutory Response to The Great Depression.............................................9 B. The Threshold Question ofLocating a Security ...................................11 C. The Howey Test ........................................................................................15 (i) The Test in Parts...................................................................................16 (ii) Application to Cryptocurrency Arrangements .....................................18 D. SEC Public Pronouncements of Note .......................................................20 E. Class Action Litigation and State Authorities ..........................................25 III. ANALYSIS: COMMISSIONER PEIRCE'S TOKEN 2.0 PROPOSAL ...................28 A. A More Granular Study of SEC Cyber Actions to Date ...........................28 B. Token Proposal 1.0 (2020).......................................................................32 C. Token Proposal 2.0 (2021).......................................................................36 (i) The D efinitions ................................................................................ 37 (ii) The Exemption Itself.............................................................................39 (iii) The Disclosures ....................................................................................41 (iv) The Need for Grandfathering of Existing Exemptions .........................42 (v) The Need for Protections Against Related Civil Litigation..................44 D. Recap of Analysis .....................................................................................44 IV. CONCLUSION: THE NEED FOR A 3.0 SOLUTION ............................................45 1 Vol. 3:1: 2022

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