The Peculiar Case of Howey Test Jockeying and the Limping Entrepreneurship.

In late 2016 the whitepaper titled “A Securities Law Framework for Blockchain Tokens” was published. The authors of the paper did more than just bringing the inconvenient issues of tokens sales as investment contracts and the resulting purview of Securities and Exchange Commission into the realm of crypto currencies.

The guideline (being a product of good intentions) inadvertently started a trend. All of a sudden, the developers and the wider community became fixed with the Howey Test score. The trend evolved into great jockeying to claim the lowest score possible as means to gain legitimacy.

The result? ICOs being sterilised of anything financial. Go ahead and examine any recent ICO and you will see big visionary words plastered all around, lengthy credentials of the development team and promises of innovations that would revolutionise whole industries. All impeccably presented on immaculately designed websites with built-in zendesk live chats. But no numbers, no financial projections, no estimates of the future payoff.

The cost? Lack of systemic and documented thought process on market potential, value to prospective client, assessment of risk and returns of (in the form of tokens price appreciation) and returns on (in the form of dividends) capital invested and resources needed to execute on the idea, building blocks that pave the Entrepreneurial road to success.

Or we can still chase low Howey Test scores and wrap it around the marketing glitz at the expense of financial vision of the ICO…

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