Note: This article was originally published on our Medium blog on January 8th, and therefore may contain outdated information. Feel free to ask any and all questions in our Telegram group.
Last week we received the results of the Howey test on the GET. This legal test determines whether or not a certain asset or 'investment' opportunity would legally be considered a security or not. The GET Foundation has always communicated that the GET, that was issued during the crowdsale period, should be considered a utility.Now the crowdsale has been completed and it is clear how people got their hands on GET, a final test could be conducted on how GET is considered from a legal perspective. The GET ERC20 token has the attributes that embody the legal/semantic description of a utility. Having an asset considered a utility is very important for a token. Getting the label of 'security' brings along a wide array of legal restrictions and rules to apply to when trading or owning the asset on US soil (or by a US person(s) for that matter). At the of the day the US supreme court can/will have the final say in what a certain asset actually represents, but having done 'your legal homework' beforehand is very important when we want to uphold our high standard of transparency, due-diligence and compliance with local and foreign law.
Justice is blind
As it is quite obviously in our own interest that our token is considered a utility, any legal test that tries to determine, should be done by an unbiased party as to so ensure there are no self-serving motives at play. Unsurprisingly serious/large crypto exchanges and investors require that such a certain legal test is conducted. This test, called the Howey test, is based upon the characteristics of the token as described in the whitepaper, blog and website.
To take our own self-interest and bias out of the picture we have used the services of a independent Dutch lawfirm De Roos Advocaten. After analysis of our whitepaper, blog and all other material, De Roos Advocaten have concluded that if the SEC would make the case that the GET is a security that they would have a hard time proving/making a legal argument for this claim. The Roos argues that GET has the attributes of a utility and was marketed as such. Read the legal evaluation by De Roos of GET for yourself to follow how they came to this conclusion. *Preliminary warning! *Very dry lawyer-talk will await you if you follow that link!
Conclusion: The GET issued during the crowdsale period passed the Howey test. The token will likely be considered a >utility and NOT a security. This conclusion is based upon the tokens functionalities and role of the token within the GET Protocol. In case the asset would be evaluated by the US supreme court (i.e. challenged by the SEC) the law firm states it would be highly unlikely that the offering would considered an offering of a security.
About the Howey Test
The “Howey Test” is a test created by the Supreme Court for determining whether certain transactions qualify as “investment contracts.” If so, then under the Securities Act of 1933 and the Securities Exchange Act of 1934, those transactions are considered securities and therefore subject to certain disclosure and registration requirements. —
Source
More information about the test and how it relates to crypto can be found on the internet with help of your favorite search engine and some common sense in search-word-selection. If there is anything unclear about the Howey test as it applies to the GET or about the document in general, feel free to contact us on the matter.
More about the GET Protocol
If you want know more about the GET Protocol, read our white paper, visit the website, Telegram or get yourself a smart event ticket in our sandbox environment.