Summary: I talk about the mental game of investing, particularly as it applies to crypto markets. Subscribe here and follow me to get weekly updates.
The crypto industry is living a lie.
Most tokens really are securities.
The crypto industry wants you to believe that most tokens really are not securities. This is the Great Lie.
Today I will explain how (and why) this Great Lie took hold, and how we usher in a new age of crypto honesty. By the end, I hope you will see the Great Lie is simple and obvious, and how you can help us move toward honesty. (It takes two minutes.)
Why Most Tokens are Securities
If you’re just joining us, the question of whether or not tokens are securities is at the heart of the crypto industry. Everything revolves around it.
For simplicity, think of a security like a company stock: like buying APPL stock to invest in Apple. Companies issue these shares of stock to raise money, then they use the money to grow their businesses.
Obviously, this is exactly what happens in crypto: a couple of whiz kids get an idea for a new product, they create a new token and sell it to investors, then live off the money while they build the product into something great (or not).
This is so obvious that I shouldn’t even have to say it: most crypto entrepreneurs sell tokens to investors to fund a business.
It may not be a business in the traditional sense (i.e., there may be no corporation), but the mechanics are the same.
Sell tokens. Raise money. Build the business.
There’s nothing morally wrong with this. As long as the intentions are good (and most of the entrepreneurs I’ve met have good intentions), this creates value for the world, in the form of new products or services. In America, we applaud small business owners.
But legally, it’s another matter. Securities, of course, are governed by the SEC, the agency charged with protecting investors (which, to be fair, is an impossible task, since many investors don’t want to be…
