In what may be a seminal ruling, the Securities and Exchange Commission (SEC) has said that a so-called digital token qualifies as a security under the Securities Exchange Act of 1934. This was a case involving a “crowd governance” scheme on a blockchain, called a Digital Autonomous Organization (DAO), that allowed investors to purchase tokens representing an interest in future earnings from projects funded by the sale of the token. The tokens also came with rights that included voting privileges on which projects should be funded by the DAO.
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