Dash Community Refutes SEC’s Claim That Dash is a Security

04/18/2023 04:37 • Metaverse Matters • 189 views

On April 18th, it was reported that the Dash community responded to the statement by the US Securities and Exchange Commission (SEC) that Dash is a type of security, stating that “there is no reasonable explanation for referring to Dash as a security.” The SEC repeatedly cited the outdated Howey test when treating an asset as a security. This means it needs to have an investment contract and profit expectations from ordinary enterprises. The Dash community refuted this claim, stating that “Dash does not have reasonable profit expectations. This is a payment technique. Miners receive compensation through mining, and the main node receives compensation through operating nodes, but no one receives compensation solely for holding Dash.” The Dash community added that no organization “promises the efforts of others” to improve the agreement. It is managed by the DAO who jointly determine its direction. The rebuttal also pointed out several flaws in the SEC’s argument. （BeInCrypto）

Dash community refutes the SEC’s claim that it is a security: Dash has no reasonable profit expectations and is just a payment technology

On April 18th, the Dash community responded to a statement by the US Securities and Exchange Commission (SEC) claiming that Dash is a type of security. In their response, the community refuted the SEC’s claim, stating that “there is no reasonable explanation for referring to Dash as a security.”

The Outdated Howey Test

The SEC repeatedly cited the outdated Howey test when treating an asset as a security. This test requires an asset to have an investment contract and profit expectations from ordinary enterprises. However, the Dash community argued that Dash does not have reasonable profit expectations. Instead, it is a payment technique that is used to compensate miners and node operators. No one receives compensation solely for holding Dash.

Managed by the DAO

Furthermore, the Dash community pointed out that no organization “promises the efforts of others” to improve the agreement. The Dash network is managed by the Decentralized Autonomous Organization (DAO), which is made up of individuals who collectively determine the network’s direction. This gives Dash a level of decentralization and user-driven direction that is not present in securities.

Flaws in the SEC’s Argument

The Dash community also identified several flaws in the SEC’s argument. For example, the SEC did not consider how Dash’s governance model works or the network’s technical aspects. Additionally, the community argued that the SEC’s claim was misaligned with how other regulatory bodies classify Dash, as well as how investors and companies utilize the Dash network.

Conclusion

Overall, the Dash community’s response to the SEC’s claim that Dash is a security emphasizes that Dash’s purpose and function are far different from those of securities. While the SEC may be applying regulatory guidelines to new and emerging technologies, it is important to consider each technology’s unique characteristics and applications.

FAQs

Q: What is Dash?
A: Dash is a decentralized payment network that uses a two-tier architecture to provide users with fast and secure transactions.
Q: How does the Dash network work?
A: The Dash network is managed by a Decentralized Autonomous Organization (DAO) made up of individuals who collectively determine the network’s direction.
Q: What is the Howey test?
A: The Howey test is a set of criteria used to determine whether an asset qualifies as a security under US securities law.

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