A Wyoming DAO launches an unprecedented challenge to the SEC

A Wyoming DAO issues an unprecedented challenge to the SEC

Today we're talking about a recent application for approval made to the SEC by an entity called American CryptoFed DAO.

The importance of this semi-unknown entity from Wyoming lies in the fact that its application for federal approval implicitly poses an aut-auth to the SEC and all institutions in the United States: on the one hand, in fact, an eventual approval of its application would set such a precedent as to open the dam to an innovative deluge never seen before; on the other hand, a non-approval would bring out the true intentions of American regulators, who would be forced to admit the real limits within which they intend to ferry the new American dream related to cryptocurrencies.

To explain what I'm talking about, I'll give a summary of the situation.

As many people know, a DAO is a decentralized autonomous organization, i.e., an entity without a CEO and an organizational chart, without a charter and obviously without a physical location, in which operational decisions are made by its own users through a voting system implemented with tokens registered on a blockchain.

In particular, the DAO we are dealing with in this article, namely American CryptoFed, is launching a two-token system.

The first token is used for governance (the voting system just mentioned) and also as a way to stabilize the second token. The latter in fact is a stablecoin.

Now, already the fact that a DAO makes an application to the SEC may seem like a gauntlet to that institution. As you can imagine, it will be difficult in the future to take legal action against entities without a legal manager and without even one employee.

In addition, this particular DAO is also allowing itself to schedule the release of a stablecoin, right now when all financial institutions in the US are teaming up to finally deliver decisive regulatory action against this instrument!

One has to wonder at this point, where do these American CryptoFed people live, on the moon?

Making such requests to the SEC at such a delicate time, in short these gentlemen are naive or "provocateurs"?

And I haven't even said the most surprising thing about this stablecoin yet! American CryptoFed wants to make a stablecoin that has no connection with the dollar! On the contrary, it is proposed as a calmer to the inflationary or deflationary tendencies of the greenback: this stablecoin claims to grow or decrease in value against the dollar, according to the amount of inflation or deflation that the dollar itself produces.

This means that if the cost of bread in America were to rise from $5.00 to $6.00 in a couple of years, the same loaf of bread valued in the American DAO CryptoFed stablecoin would remain at $5.00.

In short, these gentlemen are convinced that they can solve the problem that has plagued all monetary policy pursued by the Federal Reserve and the U.S. government for a decade.

I could stop here, but, at the risk of making this article sound like a joke, I must add that the Wyoming pranksters have also included in their application to the SEC the intention to register the two tokens not as investment securities, but as utilities.

Those familiar with regulators' heated disputes over the difference between utilities and securities regarding different cryptocurrencies know that this is a minefield.

It is also interesting to note that the CryptoFed DAO filed the application with the SEC based on the special blockchain law that applies in Wyoming: this law recognizes DAOs, which as we said, are NOT corporations, the same protections and rights as a "limited liability company" (in America it is called an LLC).

So if Wyoming considers a DAO and an LLC to be equivalent, then a Wyoming DAO should be able to apply to the SEC for registration, just as any other American corporation would. Such is the syllogism that made the American CryptoFed DAO folks take the plunge with the SEC.

Needless to say, this DAO's application for approval-the first ever by a DAO-is so full of questions, challenges, and provocations that it's destined for the SEC's wastepaper bin rather than a resounding recognition.

Yet the road to innovation is also made up of these bold moves, which often end in nothing, but can sometimes trigger tipping points.

Ripple and Coinbase are just ahead of CryptoFed DAO in these little big challenges. Coinbase has already raised the white flag, while Ripple is vigorously defending itself in the courts.

We'll see what happens, one step at a time - each crack in the future makes the wall of the past less and less compact!

Thanks for reading.

Posted Using LeoFinance ^Beta