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Nick Morgan: The DAO, the SEC and the ICO Boom

Episode Summary

In the current ICO boom, few things cause as much concern as the uncertain regulatory environment. Many do expect that at least some token sales will be considered unlicensed sales of securities and that action by the Securities Exchange Commission (SEC) will be forthcoming. Nick Morgan, a former attorney in the SEC's enforcement division, joined us to discuss the recent report by the SEC on the DAO, how the SEC chooses what kind of cases to prosecute and what their likely next steps will be.

Episode Notes

Nick Morgan, a former attorney at the SEC, joined us to discuss their recent report on the DAO and what it means for the ICO boom.

Topics covered in this episode:

• The history and mandate of the SEC
• Nick’s years as a trial attorney at the SEC
• How the Howey Test is used to determine if something is a security
• The application of the Howey Test to the DAO case
• The weaknesses in their argument that token holders relied on the effort of others
• Why the SEC did not prosecute the Slock.it founders
• Why the SEC will likely focus on token sales involving fraud
• How the SEC’s limited resources will make it hard for it to impact the ICO boom
• The implications of the SEC report for cryptocurrency exchanges

Episode links:

• SEC Press Release on The DAO
• SEC Report on Investigation of The DAO
• Seven Takeaways from the DAO Report - Kyle Mitchell
• EB134 – Emin Gün Sirer And Vlad Zamfir: On A Rocky DAO
• Nicolas Morgan Website
• The DAO Report: Understanding the Risk of SEC Enforcement - CoinDesk

This episode is hosted by Brian Fabian Crain and Sébastien Couture. Show notes and listening options: epicenter.tv/198