Ryan Adams

The investment contracts was the security, but the token, once it was on the network, is not a security and buying and selling the token does not represent a security transaction.

The deal, yeah, the initial deal, the introduction of the deal where they still packaged up a bunch of extra P and sold it, yeah.

Yeah, so a startup exemption is like an early stage startup.

You don't have to fall under the rules and jurisdiction of the SEC for four years if you raise $5 million or less.

So you do a very simplified disclosure requirement, very lightweight.

not encumbering of small, lightweight startups that need to stay lean.

That's the first one.

Then there's like a second gate, which, okay, if you want to get even bigger and you want to raise $75 million, then you can do a more structured disclosure.

That's like your second tier.

Uh, and you have 12 months to do that.

Uh,

But then you can raise up to $75 million and you have four years to figure out how to make your thing decentralized, distributed, fulfill your obligations if you have any, and then you get to become not a security at the end of that.

So it's basically just like a demo period, a trial period, a sandbox period for you to do the thing that you said that you needed to do so that you can become decentralized.

And it just protects startups so they could go through the process of maturing and decentralization without getting a wealth notice.

So it's a path.

And I expect ICOs, like ICOs in the market will do this.

And so they will probably, you'll probably see ICOs raise under 5 million from the public and then later they'll raise under 75 million.

But I think this is like a permission to ICO or an ICO structure.

that teams can do.

The CFTC this week gave a no action letter to Phantom.