ICYMI: The ICO bubble can begin anew.
In the late 2010s and early 2020s, you could raise hundreds of millions of dollars for a business by selling “tokens” “of” the business, tokens that were in some loose but definite sense linked to the economic success of that business. You could go around saying “we are launching the next hot crypto protocol, and it is going to be ‘a life-changing, you know, world-altering protocol that’s gonna replace all the big banks,’ and when it does that the tokens of the protocol will be worth a lot of money, so you should buy some.”
...and then, SEC said "uh-hu," those are securities! WE REGULATE!
It sued a few token issuers for violating securities laws, some because they were lying and stealing the money, but others purely for technical reasons, because they had sold tokens without following SEC registration and disclosure requirements. But the SEC also went after crypto exchanges.
There was a lot of pushback against the SEC from the crypto industry. Tokens, people argued, are not securities; they are tokens.
as of March 2026, they are no longer securities! Hashtag friendly SEC Chair:
Some of the obvious securities/scam-token ones now move closer to Bitcoin's cherished "commodity" status -- or "digital collectibles" whatever the fuck that is.
THE SEC ARGUMENT:
As is the case with other non-security assets, the fact that a non-security crypto asset is subject to an investment contract does not transform the non-security crypto asset itself into a security. …
A non-security crypto asset that was offered and sold subject to an investment contract does not necessarily remain subject to the associated investment contract in perpetuity.
Levine is, as always, very skeptical about this whole thing... so the crypto/token promotors are on the one hand telling their "investors"/suckers that it's a world-changing protocol the success of which will make them rich, but on the other hand telling regulators that no-no, through NO efforts of our own is this a security; people just trade shit!
The other point I would make is: In the late 2010s and early 2020s you could raise hundreds of millions of dollars for a business by selling “tokens” “of” the business, but the SEC didn’t like it. In 2026, the SEC is fine with it, but can you still do it? The crypto boom is, uh, not what it used to be. We’ve got prediction markets and AI now. The desire to invest hundreds of millions of dollars in the next world-changing crypto protocol seems to have faded abit.
= also: we don't need no cryptos no more.
archive: https://archive.md/tZQfM
i love it
Ugliness always has a way of coming around again. I don't doubt that the next time around, the scammers will figure out a new way to package their scams. Tokens are just too easy to spin up.
I’m reminded of how tv news people rely on the “just entertainment” defense whenever they get sued for defamation.
Or how Pachinko coins are used for gambling in Japan.
And CC are used for...
kNoWinG 12 wORdS iS a sEcURitY
- ideas thought up by the utterly insane 😂😂
In 2017 the story was simple. You draw a circle on a whiteboard write Protocol in the middle add some arrows to words like Decentralized and Disintermediated and then you say The token is the oil that makes this machine run. If the machine succeeds the token moons. That is the Howey test dressed up in a hoodie. You are selling an expectation of profit from the efforts of a team. That is a security.
The SECs new line is basically this. A thing can be a security in the way it is sold without the thing itself being ontologically a security forever. Sell some orange groves with a management contract and that is an investment contract. The oranges sitting on a grocery shelf later are not securities. Same logic for tokens.
That is not some deep philosophical pivot. It is a bureaucratic way to say This market exists and we are tired of arguing with it about vocabulary. We will regulate the fund raising and the schemes but we will not pretend that every transferable string of bytes is a share of stock until the end of time
Levine's skepticism is well-aimed at the internal contradiction: pitch investors on upside linked to protocol success, then tell the SEC there's no investment contract because you made no promises. The SEC's new position essentially says that contradiction is fine — or at least not their problem.
The interesting unstated part is what this does to the gap between Bitcoin and everything else. Bitcoin doesn't need this ruling because it has never needed a securities exemption — there was no founding team, no presale, no issuer to promise returns. The Howey test never applied in the first place. Every other token project that now gets relief from this ruling is benefiting from a legal escape hatch, not from having a structurally equivalent asset.
From a Bitcoiner's perspective this mostly looks like regulatory arbitrage creating a temporarily favorable environment for token launches that will eventually find their own equilibrium. The macro dynamics Levine points to — 'we have prediction markets and AI now' — are the more durable force. Regulatory clarity helps the next wave of ICOs; it doesn't create a wave.