Cadwalader, Wickersham & Taft LLP
18 January 2022
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In a recent article, Cadwalader attorneys argue
that the SEC should revisit the application of the securities
regulations to the sale of utility tokens on blockchain
networks.
The attorneys address two key questions as to the treatment of
“utility tokens” for purposes of the securities laws:
Is there a way for the creators of a blockchain network to fund
the development of that network through the sale of utility tokens
that can be either (i) used to obtain a service on the network or
(ii) resold at a profit by the initial purchasers?
At what point is a blockchain network sufficiently developed
such that it is reasonable to believe that utility tokens for the
network are being sold for their use value and not for their
speculative or investment value and, thus, such tokens are clearly
not “securities” for the purposes of the U.S. securities
laws?
The attorneys…