Good afternoon, good afternoon, good afternoon.

Wow guys, we have.

A lot to talk about right now. There's I think probably the majority of what we talk about today is, is going to be gobbled U by some really important potential news that just came out regarding Hugo Labs and the SEC.

But as we're going through this, I am furiously reading through everything that's being reported on out there, including the releases from Thomson Reuters. But Mary Beth, how are you?

What is up? Good Tuesday to everyone at Mary Beth Solis here. Thank you so much Carlos Garcia, for being here. I'm super stoked. What up money? Welcome to when spaces Tuesdays going. Amigo going.

Come on, us. Yeah.

I guess you used to say no. I'm super stoked to be here. So this is launching it off. You know, like when law, first of all. But let's just warm up for a second. That was some, like, good beats right there. Whoever's in Vegas, please don't stay in Vegas for too long. So are you there, Carlos?

No, no, I didn't end up going. I there's a lot going on back here at the office, but having plenty of fun. Even more fun this morning because for the past few hours.

The the sky is kind of falling in the NFT world.

But yeah, so.

For some things that could potentially be speculation, um. So yeah, have have you seen the the press that's been coming out, Mary Beth in regards to Yuga Labs? Yeah.

Since I'm at the top, so I just wanted to say hello Pablo, really quickly. Hi. Are you there, Pablo?

Introduce yourself because not everyone of you.

Hey. Hey. What's up? What's going on? Thanks for having me, as always. Probably together here. Web. Sure, sure. Yeah. What's up, Pablo? Enrique. I am a web three attorney working closely with Carlos and the space. Carlos. He was supposed to lend me his whole like I gear set up for the Twitter space. He has like a whole studio going on, and I'm still waiting on that, so hopefully you guys can hear me OK. But what's up? Just wanted to say hi.

That's right. Thank you so much. And I want to say oh we got some people up in here and what up? Me yagi. Why 0? Some of my favorite people what up Kit Baroness and wanted to say hi to Brumble Jacks both safest. What is going on? Mono firedog herb. I see you herb and shots fired. What is good. So hold on one second.

I was just about to throw someone a co-host, but what's good? Yeah. Good to see you. So Pablo is also an attorney. What's up, miyagi? Introduce yourself really quickly for people who don't know you.

OK, Hey, Miyagi speaking here. Um, an NFT researcher and blog writer in this space, came in, been here about a year, just focused on just documenting and just highlighting real artists, real people, real projects in this space. So I appreciate you having me up here.

Word. Thank you. Um. So, Carlos, throw in the comments. Do we even have one of those comment sections right here? No, we don't. So throw up top the case you're talking about and tell us about it. Ohh and E money. I did not look. How did I overlook you? Emani, what's up?

Chilling sorry Twitter just uh did something I've never seen before. My when I was Co hosting my mic button turned into a request to speak button. So I was like trying to talk and it was just continuously requesting speak.

Well, you are good now, so let me, um, fix some things here. But Carlos, pin something up to the top and tell people what's going on today, because this is what we're starting with.

Yeah, absolutely. I'm, I'm looking for the best source that I can to pin to the top. I'm kind of hesitant about pinning anything and I'll tell you guys why really quick. Miyagi, we were just in in a a space where we were talking about some very, very important implications from an alleged SEC probe into Yugo Labs for two separate and distinct issues. The first issue is whether the the Yugo labs.

Elections that have been deployed so far so we're talking board, Apiac club, Mutant Ape Yacht Club, Kennel Club other deeds and codas whether those themselves are securities and separately whether the the what's contained by the eight coin Dow whether a coin is a security in itself and and the reason that I'm kind of like you know a little hesitant here and and gun shy to post anything to the top is because we do not have confirmed.

Sources on these and crypto NFT Twitter is going absolutely bonkers right now because there are very very very serious implications should the SEC come down and say board API club you're a security your NFT's are a security. And remember guys that's very very different than a coin which which may be considered a security. Full disclosure I you know I have a a lot invested in.

Um, the yuga ecosystem. So take what I say with a grain of salt. Also, anything that I say or Pablo says is not legal advice. We are strictly up here talking opinion. Anything that any of our other speakers say should not be taken as financial advice. Again, that's just opinion. But I say that and if I sound sort of.

Somber. It's because they're I I can't understate the gravity of the SEC doing a probe into yoga and and potentially classifying.

Hold on, those I I just.

The the NFT collections as securities. Again, the sources are not confirmed. Nobody up here, at least I don't have any inside baseball from the SEC to oh, go ahead man, go ahead.

Are in the group. Actually just posted out something from Coin desk. Check your DMS. I sent it. I'm I'm I guess I'm just too old. I don't know how to pin anything. Doesn't work for me for some reason. So you can kind of pin it up there and take a look at it.

It's from discussing exactly the issue right whether it's a security or not, and there is an actual comment here that says a spokesperson for Yugo Labs confirmed that it was cooperating with the SEC's probe into the matter.

You.

Uh, so it's a short story, but there's something there.

Yeah.

Yeah. So that's, that's one of the articles that we were initially going off of a couple of hours ago. And for the last probably 2 1/2 hours, we've been trying to find a source on that because there's no corresponding SEC press release nor is there an official release from yoga. And Pablo, you and I both know that if that's one of our clients, we're saying, hey, don't, definitely don't talk to anybody. If you're an official spokesperson, this needs to be run up the ladder because the.

Ohh yeah.

Yeah.

Yeah.

The the things that could come of this are are pretty wild. So yeah so Pablo can you can you kind of touch on what a security is so that you know those those of us those that are down there in the audience who maybe aren't super familiar with what creates a security what what sort of elements go into it.

Would you mind kicking it off? I'm just doing a little research, sorry. Yeah, just doing a little research on the second you get some really good sources because I'm looking for exactly what you said, yeah.

Sure. Yeah, yeah, yeah, yeah. Absolutely. No, no, put. Yeah, keep finding those sources. Let's see if we could. Yeah. So, so guys, a security, again, this is not legal advice, but the basic test for a security comes from a very old case SCV Howie. And and it basically asks this is there an investment of money into a common enterprise with the expectation of profits solely based on the efforts of others. Now there was some guidance put out by the SEC in 2019.

That talked about this thing called an active participant and what essential managerial efforts are and and and some other nuanced things. But it it's incredibly important here because if we were to say that you know and and again a coin you got to consider that as something separate from this. But if we were to say hey all you got assets all you get NFT's are now to be considered securities that would have such wide-ranging effects I can't even.

They I wouldn't even be able to articulate up here on this stage what that would mean.

Really quickly. So did you say that managing, you know, whatever the asset is like the effort that goes into managing that plays into what constitutes a security, can you clarify that?

Yeah. Yeah. So so the in 2019 the SEC published some guidance and they said well for that last prong of the test that says expect profits solely based on the efforts of others. Well that's negated. If somebody is an active participant and an active participant is created by participating in the essential managerial efforts, which is it's it's all over the place and case law. You know I'm sure that it could be argued on both sides whether.

Right.

Uh, you know, being in a discord, voting in a Dow, sending out tweets, creating commerce with IP, whether those are essential managerial efforts for the appreciation of value for for the, the asset and there's there's a lot of other things that go into it, but that's that's what it's referring to. So I wish I could say an essential managerial effort is and then provide a really clean concise definition but that that doesn't exist yet.

Alright.

What a lot of also too kind of what we've been discussing here is that basically like.

How do you how what when the person buys the NFT in the 1st place, right when you go first was created, they weren't selling eight coin and all these other things, they were just selling the NT right. And I think it's pretty confirmed that most of the people that I've spoken to that are that are boarding holders have all said we didn't know this was going to happen.

You know we weren't expecting any type of expectation of profit. We were just buying a pretty cool piece of art. So there's always a the other argument right, where it's like well how do you, how do you prove that there was an actual expectation of profit from the beginning of the purchase? You can't in my mind in my opinion you can't right the I think for me a lot of the issue where it comes on is to as it progressed.

And as they started selling various products, right, basically creating the app coin, which is why Carlos is mentioning that it should be considered like separate, right? Then maybe you can get into that argument. But as far as I'm concerned the expectation of profit it it it's acquired peace as what is a security and if I'm just buying an NFT from the beginning.

Well, how do you prove that that was an expectation of profit at that point? So it's a it goes down a rabbit hole that I think I'm gonna just put myself on pause.

Word.

Yeah, yeah, they're there. And you can go super deep down the rabbit hole. And I want to get to Mary Beth. If you, if you want to get to the hands, we could start to.

Yeah.

Yeah, yeah, yeah. We'll get to some hands. I'm gonna go to Brando, then miagi, then Psychonauts Brando.

Hey, guys. I just honestly wanted to hop in here to say, you know, this is a very, very nice space, super like positive energy and we got some intelligence speakers up here too. I mean this is the kind of content that I really look for when I'm joining spaces. So I just wanted to say that first and foremost, I also find it increasingly interesting what's happening at the moment. I think that.

You know, there's a lot of people right now, they're like, Oh my God, our NFT's dead. It's like, this is what I've wanted as a founder for so long. And, you know, I've had these discussions with some people up on the stage actually is that there is no framework. It's so difficult to navigate the space as a founder when there is no framework set out to allow us to do that. And so, you know, I'm familiar with the Howie test. I I've read that, you know, a billion different times I've been, you know

Couple times by my attorneys and I think that this is really gonna pave the way for NFT's to actually take that next leap. And I just wanted to say for one, I'm just extremely excited about it and the fact that for one, there's not another room in the NFT space on Twitter right now that is sharing this type of content. I would encourage everybody to share out the space because this is the kind of stuff that I live for. I listen to. You know, I'm going to be spending my afternoon here and I would

Just because Carlos and Pablo are given their time, I just think it's amazing what you guys are doing, so shout out to you guys, man.

Yeah. And for anyone, thank you so much Brenda for all that love. We really appreciate that. And definitely I'll follow Pablo and Carlos. No legal advice or financial advice in here per Carlos's mentioned and pen tweet up at top. So thank you so much. Brando Miyagi, what's good?

AA.

Bro, how you going to say that with me up on stage, man? I'm right here. Damn, I'm joking, I'm joking.

I'm joking. I'm joking. I'm joking.

What was that? Mary Beth, Congrats on the 10K. Well, deserves. Yeah, I I literally follow Carlos out of that other room because he's. I'll say it in every space. He's my favorite lawyer in this space because of just his transparency and his ability to remain unbiased. Nah, Pablo, I have. I haven't met you just yet, though. Pablo. You know what I'm saying? Like, I haven't really spoke with you. Maybe you'll be my favorite, though, in 30 seconds. You know what I mean?

But no, I really appreciate the ability to remain unbiased, right. I think that's a really big thing in this space. So I appreciate you for that. Now to like sort of unpack this.

When when looking at NFT because I've researched NFT's to see what to rub what's not a rug, right, if I'm being honest, and to just be like I don't know if this is like a devil's avocado, if this is just a hot take, every NFT is a rug, essentially because there's no liquidity pool.

What's going on?

It's.

So like when I see this conversation and then like I'm trying to understand, well, did people buy within with the intent to make money? It kind of confuses me or it may confuse people because the only can you guys hear me?

Yes.

Yeah, go ahead. We removed.

Party or go back, OK. The only way you can necessarily make money is if somebody buys it from you for a higher price, right?

Imagine if the the projects do nothing. So though that custodial effort were, that's what got me, is the community now on the hook? Because they're the ones who built up everything, got all the hype, and made the floor price go from .005 to .3? Because they do a lot of shit for projects, use my language. And so now I'm like kind of confused as to who's responsible for all of this and like, where does that? Like, yeah, it's really interesting. So I hope that makes sense.

But yeah, that's where I'm at with all of this.

19 Yep.

A 1000% you make sense you know speaking to tons of attorneys in this industry we all kind of have the same exact conversation right and you can kind of argue it in so many different angles and another piece that I always kind of like add to the conversation when discussing how and what is the security these this was based on case and going to say it was in when this is the 40s nineteen 4546 something like that right. So we're we're just.

Essentially discussing a case that is applied towards digital assets before the word digital existed.

So for me, I just can't compute that as to why are we applying this and it's just because that's really all we got. And I agree with you Brando, when you came up and you kind of spoke on it, I'm kind of, I am kind of intrigued as I am very intrigued actually as to what's going to come out of this because we have been looking for so much guidance and I'm hoping that this provides the guidance without hurting the space, right. And it's really interesting to see what's going to come out of this def

Yeah.

To Brandon's too. Like for the founders, it it does kind of. Not only did the bear market put things on pause, but now this puts things on pause too. I was in a few other spaces where literally this this story popped up as the dude was talking about, yeah, we're going to be giving this back to the holders. And the host was like, yeah, no you're not.

Like just straight up like that because this literally came out. So it it really is an interesting time to be here for sure. And I love being here at the forefront of it.

Yeah, the and and those are all good points. And I I think #1 it's important to get all different sides and different takes on this because surely it most of the stuff can be argued either way. The second thing is that and this is really important to remember again, I really feel like I have to say this is not legal advice before I say what I'm about to say. It's surely not the case that anytime somebody makes money there's a security involved. It's just the case that secure the securities.

Fact provides frameworks for certain investment contracts that make disclosures about information compulsory. And so yeah, and, and I agree with you, Pablo, it's like it's almost absurd to think that Howie is the test that we use for this in some ways. But you know, the best we can do is take these frameworks and apply them to what we have. And so if you go back and look at things like the 2019 guidance put out by the SEC, it kind of, you know, it touched on some of these things.

But there's this other beautiful thing called utility. And in my mind at least in this, you know there's not been a lot of if any decisions on this. But in my mind the concept of utility creates activity creates maybe what's going to be considered a non monetary incentive at least within the the definitions of the Securities Act. So there there's a lot of different aspects to this and just remember you know as project founders and and Brando I'm sure you can appreciate this.

If you want to create something where where people can make money and it not be created a not be considered a security, you can. You can put friction in the way of them and and the return that they get. What I mean by that is create little activities for them to do. Create little you know micro jobs for instance. I'll use half baked as an example. You actually actively have to go out and find a partner to contract with if you don't already.

Only you get assets, so boom. You already have an essential managerial effort, probably an active participant. At least that's my analysis of it. And so there's there's a lot of different facets to NFT, so just important stuff to remember.

Hey, I'm gonna go to Psychonaut. What's good?

What's up everybody? How we doing today? I just want to give a little context so, you know, the way I kind of, First off, I just say I'm not a lawyer. That's totally my opinions. I'm just, you know, adding value to this conversation the best I can.

Really the way I kind of look at NFTS currently is there's kind of three classes and sometimes there can be more than one class attached to 1 NFT. I see it as, you know, one the trading card value and just, you know, trading card just like you trade, you know, baseball cards and they have value just based on people's, you know, opinion or rarity or whatever. They decide to make that right. You also have the access point, which basically just the membership access and then the other, the other on

You know, unfortunately what I would consider is security personally is where you're promising monetary value for purchasing this product. And that's really the three classes I want to go with. And that's kind of how I've, you know, navigated through this landscape when when we start talking about, you know, board ape, for example, when it started, it was not a security at all. There's no even way to consider it one, it was more of a trading card and then it evolved and when it evolved.

They brought a coin into the mix and then they acted as if you know, hey, we're going to drop this. They announced it early and when they announced it early, it gave those new people entering in an incentive to buy based on monetary value. So the price went up because people wanted to sell. They had so many apes, whatever the case may be. So it allowed entry point for people to buy in to then receive a coin. It also seemed very organized, very planned out.

And very methodical for everyone who wanted to make a gain off that ape coin. And we saw it with the, you know, you can look back at when it launched and when it went up and when it went down. It looked like a pump and dump. You know, just looking at the chart, it simply looked like a pump and dump. And yeah, it's pumped and dumped a couple times, but at the end of the day, you know, people were pumping their bags and dumping them. And so I don't know it for me it just, it seems like, you know,

That you can't do, that you cannot offer these coins with liquidity attached because that risks a potential security threat and.

We we just we're seeing big big companies come into this and there's a reason why they're not attaching that stuff. They're making it all membership access that's it. And so Starbucks there's some other big companies that have jumped in. It's all just access and I really don't think that Hugo Labs intended to originally do these things. But as it evolved into something that they didn't want it to you know no one how how well they know is going to become this right like no one would have thought

We needed Yugo labs to happen for inactives to grow the way it did. It's a huge part of our ecosystem and how we all kind of came into this. So you know, it's unfortunate way it went down but.

It's really hard to believe that when it goes and if it does go to discovery that they're not going to find a lot of messages on the back end that do discuss things like this from either holders, potential holders, owners, founders, employees, non employees. And I'm quoting that because I've heard situations where mods have said, no, I'm just a mod, I'm not an employee and vice versa. There's been a lot of, you know, talk around that. So for me and just, you know, looking at this.

It's the same thing Degas is doing with dust, you know, and you it's all just it's gotten out of hand and and personally I feel like it's it's not OK and it doesn't make any sense why we you know don't just call a spade a spade at this point.

Thank you for that. I I before we move to the next hand I want to tell everyone thank you so much for coming to this space. This is the launch of 1 space is Tuesday. Very honored to be here have my co-host Carlos Garcia please go ahead and follow. Give uh when spaces some love give him a follow because their spaces are about to be popping. Also wanted to welcome everyone who just came in here. It is a lot of time with Carlos who has just officially started his fashion show for the space. He tend

For being here as well, immani.

Yeah. So I actually wanted to chime in a little bit.

Off hand on some of the you know, the the legal ramifications of this are interesting, but I also want to point out that I I don't think that.

Um, this?

Coming should be a surprise to anyone.

And, and this is personal opinion, but lawmakers have routinely shyed away from any sort of regulation over this entire industry, even seeing it grow as fast as it has, to the point that they have turned away people from advising on matters regarding the creation of laws if they were holding cryptocurrencies because they were not impartial or something, which is weird.

Because if you're holding stocks, you can make financial laws, but not on other assets. Anyway, that's just a side point. This is good for the space though, like we need regulation.

Because.

Even now, like, I literally have three projects that are talking to me that I'm having to tell them if you're gonna offer some sort of coin, you need to have a lawyer involved because on that are different in every country. It's a huge issue. And like, there's not even consensus on that law here. And I I think that a lot of Americans and a lot of the world look at what's going on in the US and determine how they're going to play their cards accordingly.

And something I think earlier you were saying that there was never a no enforcement letter sent by Youga, is that correct?

That.

Oh, sorry, I was fumbling for my mic button. Yeah, what? What I was referring to is that there there was no submission for a no action letter to the SEC when when when a coin was launched. And again, just to be a couple of things. I know we have some people joining us, so some really, really important things to keep in mind here #1 the news that is broken is in regard to an an alleged SEC probe into Yugo Labs and FT's and separately.

Into Acoin and to be clear, there are two different companies very important to remember here. That and I'm I'm constantly monitoring right now yoga, the yoga Twitter accounts, and the official sources from the SEC. I have not seen official announcements. This is all captured primarily in a coin desk article that broke a little bit earlier. Not saying that it's true, not saying that it's not true, but just some good context for you guys to have.

So Carlos, in your opinion would.

The company.

Would it be?

Normal for a company to.

Uh.

You know, not send that letter without knowing that they were supposed to.

I'm here Fraser.

So a couple of things normal, I, I don't know, I I don't know the the ratio of things that are launched that are later considered securities that that weren't initially considered to be securities and then knowingly it you walk a fine line when, yeah.

Your phrase would.

I would you.

In or would it? In your opinion, would it be wise for?

A company that had the amount of assets that Yuga and eight point Dal separately have to send that letter ahead of time unless they were intentionally not sending it.

Yeah, that's a tough question. And and just really quick, I Ellie welcome up to the stage. Ellie is another lawyer in the space, very, very intelligent, so please feel free to.

Holly.

What up?

Hey.

Hey Mary, hey Carlos and Pablo and Leslie, everyone.

Yeah, we have three dope attorneys in this space. Again, nothing is legal or financial advice. See the pin tweet up top? Welcome, Ellie.

Hmm. And so Ellie Pablo, feel free to jump in on this, but I think it's hard to say. I I don't know all the facts, I don't know the situation. What I will say is that from an outsiders perspective.

If you're a company with a significant amount of resources and you have the legal team to put together a really good no action letter application, potentially that would be a good way to avoid some issues later on. But there's a lot of other business decisions that go into it, like the potential delay to whatever you're going to offer. You also run the risk of the SEC saying, whoa, whoa, whoa, this is actually a security. This is actually something that we need to regulate.

So it's, it's it's just as much about being strategic with your business moves as it is with the law. By the way, I'm not saying to violate laws, I'm not saying anything like that. I'm just saying that there's a lot of different factors that would be considered in that. Ellie, Pablo, would you agree with that?

Yeah, yeah, I I think, uh, first of all, yes, I agree with you. No financial advice, no legal advice. We're not telling you to break the law whatsoever.

It's kind of like you gotta, you gotta kind of weigh out the business and legal decisions there. And at the end of the day, it's up to the founder. Us as attorneys, we can't.

We can come into the company and give you advice. We're a consultant. We are giving you advice, right? That's what we do. And yet at the end of the day, it's up to the founder to decide whether or not to heed that advice and to listen to us and how to really move forward. And The thing is that at that moment, it's a very good question. I'm glad you actually asked it.

I don't know enough of the facts that I just don't know. I wasn't in the room there right at that moment in time. But I would definitely let them know that you kind of have to wait it out. Do we have enough money in the company to one delay this, right. Like when we do this drop, if we go that route and we go and we notify the SEC, right, then what happens as a result of that? Well, you got to break down. This is what's going to happen. This is what could happen. This is what might happen, right

And then um, if we don't do this well, what are the, the, the, the results of this right going down the line and my kind of just quick take on it is maybe that.

Maybe they were just weighing out short term versus long term. Do we do this now and lose a good amount of a good chunk of money in it or do we kind of wait until the probe happens later on and now I mean you guys in a great position to fight this, you know, they have you know bills on bills, racks on racks, right. They can pay people to actually do this or at that moment that they were doing the initial eight coin. I don't maybe we wouldn't say the same thing you know, so it's it's definitely a

You know, kind of weighing the scales of between business and legal and again you know attorneys, I've been in this exact position with a lot of companies and you have to just give the founder as much advice from your end and be a good attorney to let them know that. But at the end of the day, it's the Founders decision, it's not the attorney's decision as to how to move forward with.

Yeah.

Thank you. Go ahead, Carlos. Just have something.

Sorry, I just. I wanted to get your take on it. I know it just broke a few hours ago, so I don't know if you've had a chance to take a look at what allegedly is going on.

Yeah, we spoke about it a little bit earlier in lot line. So not a lot of time not to be confused in likelihood of confusion for trademark infringement. But yeah, so I I don't think this is very surprising. I think that there's probably a lot more projects that have been requested information from them from way before like earlier in the year. So this is doesn't really come to a surprise. I think I'm interested to see how they're treating the.

Deep down because they did try to kind of distance themselves like the article mentioned which is true and we spoke in in different spaces. Carlos, I don't know if you remember back, but a few months back we used to talk about the structure that they created, how genius it was because they have like a multi layer structure to this dance the Dow from Yuga Labs and as an entity. So they're operating as separate entities. So I'm interested to see how they're going to treat both and if they're going

Them similarly or as a one so that that's my take on it.

And and given that, OK, let's say the SEC comes down and and rocks it and says, you know, I want to take it to a kind of another level that that I kind of asked in the chat. It's like the SEC comes down and says this is securities. Yoga is selling securities, they've been selling securities, pay these fines and let's get this rocking. What kind of recourse, what happens with open sea? What happens with the marketplaces, you know, do they have to suffer the same amount of fines because they're wh

Alleged securities and I just kind of wanted to get a quick, I guess take on that from Carlos and Ellie really quick as to what you guys think seeing happening there if this ends up being a security?

Yeah, I mean, you know, ultimately I think we, we kind of have seen how these things will play out with what happened with with Ripple and XRP. They were removed from some centralized exchanges. Yes, you can still get it on you know you can get XRP on uphold. There are ways to get it, but I think that may happen. But and and this plays into a couple of other quick points, but very important to remember #1, there's this argument that we've talked about Ellie and Pablo, you know we've talked about

And you probably hear it all the time. If I have an offshore entity, I'm somehow insulated completely. That is absolutely not true there. There are are ways to develop jurisdiction if there's an offering made to a primarily U.S. market. There are a lot of different things that come into play there. The question then becomes and and Ellie this goes right back to the corporate structure that we talked about with dividing yuga and and eight coin Dow into two separate.

80s There's there's also this concept called an ultimate beneficial owner.

And So what that means is who's really deriving the benefit from this? There's some case law out there that that kind of shows if it can be traced to a certain source that's going to be benefiting. Well, you know, then, then there may be some bigger issues there, but just some important concepts to remember. Ellie, go ahead.

No, I agree with you. I think that for the most part, I mean everything you've said we've kind of touched on before.

As far as the structure goes, but I guess from my take is.

And and we've seen this recently and I think Telegram was one of the cases that that they if you kind of are targeting the US consumers, you're still going to be have a the security, the security and Exchange Commission is still going to have an arm to reach you. So I guess my question is are they going to be treated separately and differently since you know I mean not no, I guess not differently but you get skier and you know the foundation is in the Cayman Islands, So what would be procedurall

Yeah.

How are they going to approach both of them? I mean any of you know, like I I really have no idea. I'm not a securities attorney. For me this is also kind of a Gray area and I also want to know like the implications in the market afterwards. And going back to Pablo's point about the marketplaces, I would think that they would be have to have some sort of license in order for them to continue selling the NFT. So does that mean that all marketplaces even if it's one to one or how, how would that l

As far as the marketplaces.

Yeah, that's and and sorry, I know we got some hands up, so I'll be very brief with this. I think the sort of how I see this playing out is if they can establish an under the legal frameworks that exist for what UBO is that the liabilities, the jurisdiction will definitely attach and essentially they'll, they'll sort of be looked at as one entity. But surely there's going to be 2 separate analysis, one for the NFT offerings and then one for acoin and that that's.

Kind of how I see it playing out.

Thank you for that. I do want to go to any meeting my name on Miyagi then Brando.

Uh, Brenda was before me. I'm cool waiting.

Four, OK. Thank you, Brenda.

Sorry, I.

I blanked on what I was gonna ask but I do have another question. Um, I know a little bit about virtual. What are they called the Virtual asset service providers? Do NFTS classify as that? And just I know this is non legal advice and just trying to.

Um sparked some discussion maybe, but in terms of asks when it comes to SC and and how that all plays, you know together and what the situation is currently.

Yeah, I I don't know off the top of my head I I would really have to look more into what the the tests are, what the elements are for virtual asset service provider. But duly noted, I I will take a look at that. I just don't know enough off the top of my head to really give an intelligent answer.

Miyagi.

Miyagi there, bro.

Yeah, I am. Ohh. Marybeth was talking. I can't hear her because that's happening.

Oh yeah, it might be. It might be.

Damn.

Alright, I'll be back.

Yeah, it's. I know this has been happening a lot, but go.

OK he he'll he'll be right back up. But now you know the again, just to kind of reset the room a little bit because I know there's been quite a few people that joined since we started. Nothing that I say that Ellie says that Pablo says or any other lawyer that gets up here should be considered legal advice. If you need legal advice, go to a licensed professional so that you can get that one-on-one attention it takes to really provide, you know, effective advice on these issues. Anything that we

You hear me first of all?

So please don't take it as such. With that being said, please guys get your questions out. I know right now it's kind of we're we're in The Newsroom right now and and this is a very 24 hour news cycle sort of thing going on here. I'm actually, I I have a question for you Mary Beth, because you do a lot of advising.

Yeah, I can hear you. Yep.

Can you hear me OK, great. A lot of advising.

Yeah, I I do have a question for you. So, so you provide marketing and and business strategic advice to a lot of projects out there. How often are you seeing the sort of mention of securities come up as you guys are are developing your strategy for launch?

It always comes up. And the only thing I can say to it is that's a wonderful question or inquiry. Now let's hire a lawyer. That's the only response I ever provide because I don't even want to cross that line. To be honest with you. I don't want to even engage in the conversation because one little thing might freak them out, you know, whether it's true or not true. So I'm just like, hey, let's get that attorney on board.

Absolutely. And we got Miyagi.

Go ahead.

And it happens often because it always happens because it's it's about the cleanup process. People always. Here's the thing, the one piece of advice I do have regarding, you know, the the law is try to get your team, you know, worked out straight before you have to clean something up. That's a mess, right? So I'll hand it over to miagi.

OK, I can hear you. I can hear you and no, and that's kind of where my question was. It's really like in a thought provoking way now that we haven't this information, right, if for some reason they did classify NFTS as a as a security?

Or like is there something that founders can learn from this moving forward to avoid this happening?

And kind of like to what you had just asked, Mary Beth, what are some of the things that are being done now that we do know are securities? Can we say that? I don't know if you guys can answer that.

Yeah.

Well, Carlos, Ellie, Paulo I I have a comments last question I do you think that even being in best practice of just the way so communications a huge part of my world, right. What you say, how you say it, whatever you tweet say in a space verbally, but even removing certain words from your everyday vocabulary including the word investment investor investing things like that right.

Yeah. And Pablo, go ahead, man. Go ahead.

Ohh, yeah, I would. Thanks Thomas. I was just gonna say yes.

At the end of the day, the some of the guidance from the SEC though has been more so that even that doesn't really matter, that what really matters is the action, the underlying action itself. I forget the exact wording for it, but now it's something along those lines where it's like the under action, the under acting underlying action itself is what matters more. So although communication is very important, I recommend people I recommend to clients all the time, you know, don't go out and sayin

You're gonna make money off of this, blah blah blah. Don't do that. But at the end of the day it what really matters is the actual action itself. So go ahead, call.

So what's a simple action to avoid? Can you give us an example?

I would say here, here's what I would say to a client. Again, not legal advice, but this is what I would say to a client if we were having these conversations.

At a very basic level it is this the whole is this like an overview of the project.

Are you enticing somebody to buy your NFT project by promising them they will get some sort of financial gain? And so it's a simple question, but that leads to a ton of other things. Ellie. I don't know if you see it like that or or if it's that sort of simple of a question just to start with and then get to the other ones, but yeah.

So again, so not a securities attorney, there's probably way smarter people than me in the audience about this topic. But from a personal perspective, I would say that the most important thing in is that we may actually move towards a place where we're buying PDF's for the actual art. But I don't know if you remember Brian Fry Carlos, that he's an absolutely great professor. He also says that art, like physical art, is also.

Essentially a security. So I don't, I'm torn because if we're moving towards that side of the spectrum, then like physical art could be potentially considered a security because you could potentially buy a painting with the expectation that the painting goes up in price. Like you buy the Mona Lisa or whatever, you're expecting it to go up with price. But I don't know the second is going to move that drastically towards that end. So if we could analogize potentially with physical art, maybe we go

NFTS and then we've moved to a place where you're selling the NFT for the art itself, not because it has any any actual kind of benefit behind there or you're not, you're not doing it you know like you're not investing in a or not investing but you're not buying it for other purposes rather than to just admire the actual art. But again that that's kind of a a double edged sword because then we also have entities that could potentially have really great utility like the ones for like if you have

Or something like that. Then at that point we lose that that that benefit as well. So I'm kind of torn in this space because I do believe some of what Brian Price is the the professor says is true, but if so, if said moves in that direction then I think we're all screwed.

Yeah and I I I have read through some of his pieces. I think that you know my take on it is this, number one, I I'm very hesitant to I I I don't like a ton of regulation when it comes to to things that are really going to impact the retail investor. I mean I'm sure there's a great documentary out there on Robin Hood and GameStop and that whole crazy you know issue and and so you know we're we're largely a group of retail investors.

Uh and so I I think that we just kind of have to take a very cautious approach to that because you you surely don't want to make it so that the little guy so to speak and I'm using some big ass air quotes here can't get in and and turn a profit. The other thing that I think is just an intuitive common sense question when it comes to securities law is can somebody hide something from you to increase the value. So you look at pieces of art, well art is largely based on fair market value.

And what the perceived value is of the piece, that's very different than having a company like Apple that relies on tons of different inputs that affect their bottom line. They're required to make disclosures because they can't come out, for instance, and say, hey, we're going to have 20 million new iPhones ready to go at the launch of Q4, knowing that they don't have a supplier lined up or anything like that simply to you know, blow up the, the value of their project. And I know that there's so

Entire gamut in the NFT space. OII think I I'm a fan of intelligent regulation. But again, it's like it's super subjective because I'm sure that there's a dissenting opinion from somebody out there that that says we just shouldn't regulate any of this. It's decentralized. You're buying your little monkey JPEG and you can run around happy as hell, right? But yeah, it's just it. It gets into a lot of different sort of legal and philosophical issues.

When we start talking about how to regulate, go ahead. Maybe.

Yeah, I'm, I do see hands down there people requesting to speak. So if we bump you down, please, please, please know that we will always invite you back up. We just have people who might have active questions in the moment. So just wanted to give you heads up. Also wanted to welcome squeeze taxes up here. He is a crypto accountant just to let everyone know. Always good to see him up here you know, just in case any questions arise in that aspect and the same disclosures applied to him as well reg

They go nuts, hand up.

Psycho not are you there? Otherwise, if Ellie or Pablo had any other follow-ups, please share.

I think we need a secure returning in this stage because this is a very complex issue that a really, really good securities attorney would definitely have to go into. Even just from my perspective, I think this this is just a very complex issue.

Complex issue for sure, but you know it's one of these things where there's A and this just kind of goes back to any of the specialties that there's only a couple of of true specialties in the legal world, patents for instance that that require an additional level of expertise. So I'm not saying that that wouldn't be useful, I just think that there's a lot of room for common sense, but well informed conversation on it and and I think if you get two really good securities attorneys in here they p

A lot of the same back and forth that we do. I'm sure it largely depends on which clients you're taking on about the position that you'll, you'll sort of be arguing for. But yeah, good point though.

Before, before we go to the hands, I had a really quick question that came to mind. So, you know, if there's an NFT project out there, right, and you don't promise anything, but at some point, you know, you give them something of value, like whether it's an AirDrop or surprise and that happens to rise in value. The intent was never there. So where does that fall?

It's.

Or if you even drop them a non uh, what do you call them? Like the ERC 20 tokens, right. If those don't have any value, there's no LP attached. Like if you're giving those and then OK, start with my first question and then go into the token thing because then I was like, well, what if we can trade in those tokens for NFT's? Is that an issue?

Yes. So there's a very complex legal answer to this and it is, it depends. There's a lot of different circumstances. I know that's a cop out, OK. I do know that's a cop out for for that sort of question specifically and and Ellie and Pablo feel free to hop in on this. But there's there's situations where it may be considered a security and in situations where it may not be considered a security. I think that the things that that we got to remember are the definitions that we have.

They're already in long guidance, which is you know, is is there an active participant, is there some essential managerial effort being put forth to to get the benefit of the, you know, whatever you know, whatever you'll receive, whether whether it's crypto or or NFT's, you know what have you.

Yeah.

I mean if you.

Sorry, I know it's not. It's kind of an unsatisfying answer, but.

Yeah.

Good.

Let me be a little bit more specific, if I may, Pablo. Like, if there's no intent there, right, and you're just kind of like losing your way through the NFT world, and then you have a group of anonymous whales who get together and somehow create some environment or atmosphere to give value to NFT's. I mean, how does that work?

Well, let's kind of like go back to the definition of of what the Supreme Court established is an investment, an investment contract, right. It's an investment of money in a common enterprise with the with an expectation of profit to be derived from the effort of others, right. Let's just kind of start with that and it's like you could and again, not legal advice. I don't know. It depends. Carlos is 100% right. This is the favor of the answer because it's the truth. It depends. But I can also se

What was the expectation of profit? It was, it was almost like a gift kind of right, that it was just dropped in there. When you got into the project, you didn't expect it, you didn't expect that you were going to receive that. So how can you say that it's an expectation of profit when literally was just a surprise? So this may be a way to make an argument for that. But again, I'm sure there's attorneys that can argue against that as well too. So it just, it really depends, you know.

Carlos Ali.

I I go ahead.

Now it ohh good.

No, ma'am, you you go ahead. I was just gonna say yeah, it depends and cosign it, but I I'd love to hear you put on it.

No I think Carlos you should probably read the definition of actual what like securities because in this in this term like we're the the way that we're defining analysis that like as an investment contract and then that's how we're going to how we test. But like if if you're even if you were doing that and there's no intent and I don't know that intent is even like a one of the requirements for it is just did did it happen. It's like did did you actually provide an expectation of profit whether

I don't know Carlos, you may know more about the actual legal standard for it, but it's intent part of the query that you go through determining whether that investment contract where that investment vehicle other than just the creating the expectation by promises.

Yeah, no.

Yeah.

Ohh yeah yeah it yeah no.

If that makes any sense and it's more of a question because I don't know. I'm again, I'm not a security attorney and I think that we have some really good attorneys that have could come up on the stage and actually like Ira you were on stage. I mean you're in the in the audience, you'll be great to because we we have questions, we don't have answers, at least I I have more questions than answers.

Yeah, definitely. That's why these spaces are so good because we leave with the questions that we absolutely need to answer ourselves. So, Mary Beth, I know we got a lot of people requesting specifically if if we could fit IRA up here, that would be great because.

Yeah.

Is IRA in here or is there you are?

He needs to bring some.

He that would be great. He's so yeah. He is. He will be the person to speak with because yeah and I'll come down if you need to bring someone out like I'll I'll stay on my lane, which is IP. I'll let the the like people speak sick.

I'm gonna drop down you guys. I just appreciate the the the discourse and you know this is a great space. So shout out to everybody on the panel. Appreciate you.

Awesome. Thank you so much. Uh, we'll get our up here if you're down for it. So good to see you. And for anyone who just came in, we're talking a little bit about yoga a lot, a bit about law and a lot of answers that start with the words. It depends. I do want to go in order of hands, so stake my claim, then crypto pedia, stake my claim.

Thank you very much. Good evening.

I'm a European retail investor, quote UN quote a little guy so to speak, and I'm not really interested in in ape in the regards of DfT that they provide.

However, I have been following DSC in regards to Ripple Dragon Chain Library and the Wai Court case, and I'll be paying attention to this court case as well.

I think that there is a common denominator between all these cases, what the SEC is doing. So maybe that is not really a question, but actually an answer for a question that hasn't been raised yet.

On what to make of this and where do you stand and where does it position itself as a project towards what the SEC wants?

If anyone would be interested in hearing that.

Yeah. What's your take on it, brother?

Well, the short story is that it seems to be a government sign of approval for doing business, because Gary Gensler has said on the various interviews what he plans to do with this space, but you have to just piece the puzzle together, so to speak. He had a brilliant interview with John Stewart on Apple TV explaining that they lacked the funds to basically regulate every single token individually. So they have to be tactical strategical in where they file their claims and what type of claims the

In order to create some sort of litigation or yours prudence for the European regulation of the American regulation of the of the digital assets market in Europe, we have the MIC, our regulation. Gary Gensler also stated with numerous visits to the European Commission and vice versa the European Commission visiting the SEC that they want the same regulation and legislation in the US as they have in Europe to basically put the burden off KYC.

Of anti money laundering of trading digital assets. Uh, privacy legislation on that burden has to fall on the exchanges. Gary Gensler also stated that every exchange that wants to trade crypto or digital assets in the US has to be compliant with the SEC. And if you look at the various court cases, it seems that day choose those projects because they represent a big chunk of how the market has to be regulated. And there's also the CFD.

Which is for commodities and Europe micro regulation also has legislation on utility tokens, which the US doesn't have. So it seems to be that that's a part of the discussion as well that I just just heard mentioning with art. Is art as security or is it a utility that utility legislation isn't there yet? You'd have to go to the Ripple Court case for that and the SEC versus the Wahi court case for that.

And it basically, uh, in the Wahi court case, there was a very interesting conundrum happening that there is some sort of rule by decree because, dear, there is a an insider trading.

Court case going on versus the three members of Coin base. But you can also only do insider trading if you're dealing in securities. And are 9 tokens listed from ERC 20 and there is one LCX exchange token listed, but they aren't listed as defendants. So if why he loses the court case, those tokens will be listed as an as a security that's at least a difficulty perhaps for the ERC 20 tokens.

But I want to go into the LCX token which is an exchange and Lifton Stein in Europe, which is the only mica compliant exchange in Europe. It's even ahead of that from in regards to Binance, they've been legally compliant since 2018 and it's the only compliant exchange globally that.

China means something, and they've put forth a law based on utility tokens with the CFTC Commissioner about a month ago.

And it seems that that's the direction that this market in the US is going for to determine what is a security and what is a utility. And regardless of that outcome the tokens listed in those court cases will have a settlement which means that they'll be listed first in in how to in what you can trade as a retail investor through whatever exchange will be first in the US as well whether that's LCX or Binance. So I think it's.

Not so much the question will it be a security or utility, but more open up the champagne because it turns out that you're getting a first seat at the table. If this whole court case goes through, I know my question would be who to follow in this space to follow this on foot.

Yeah, I do.

Yeah, I would start by following the SEC's Twitter page. Uh, if you're if you're not already doing so. But look, all good points. And yeah, that that's a good one. All, all good points. Even better to have a reminder that this is a very global.

Industry. So it's not it's not that the US laws are always going to be you know the the pinnacle of all legal systems. Surely those of us in the US have to abide by those laws and and sometimes those outside of the US if they're availing themselves to the American market. But good points. Thank you for, for sharing your opinion.

Yeah. Thank you so much. Uh. Next was crypto pedia.

Cryptopia what's good? You there?

I am here.

Awesome.

So I I heard the first mention of the CFTC there, which is kind of what I wanted to bring up in this. I haven't heard anybody talk about what Kristen Gillibrand, Cynthia Loomis are working on the responsible Financial Innovation Act.

I I think the point there is to.

Kind of erase this entire discussion that we're having and make it much, much more simple in the digital asset world to figure out what a.

Uh, what's a commodity and what's a security? And and really to make that dividing line is that in the digital asset world that a security is going to provide you ownership interest in whatever that.

Uh, joint thing is.

Yeah, you.

Umm.

Go ahead.

I think you bring up a good point with the Loomis Gillibrand bill and some other proposed legislation and and this is I'll push back on it just a little because I think if you if you really read between the lines of the bill, if you read the bill itself, what I got from it is that.

Right.

Everything's probably a commodity unless it's a security and and I don't know at least from my standpoint that it does enough in terms of providing those finite guidelines that that you would really want to see and look, the reality is that we as as lawyers, we have to advise people on a daily basis operating in this Gray space for a lot of different facets. Ellie does a lot of IP. Ellie, would you agree that there are some unsettled?

Issues in intellectual property law that you have to to operate in this Gray space with.

Yeah, most of it right now as it applies to these, yeah.

It's a lot of Gray area.

Yeah, and and.

And and and it's the same with with securities, it's the same with to to some extent commodities. So points well taken definitely I think as we see time go on, there's going to be more and more proposals a lot of people are going to take more interest. But again you know I think it's it's going to be exciting to see how it pans out. For now we're dealt with this Gray area and really quick and I know we're going to go around to hands but quick shout out to China, another one of our.

Law homies. She's been an OG in the space for for quite a while, so definitely should kinda. As you hear us conversing about all these different legal issues, please feel free to chime in and and give your input. We'd really appreciate it.

Yeah, no.

Yeah. So go ahead.

No, no no it's OK no problem. I mean the the crazy thing is I've I was attending the it's DC Finn Fintech week and so I was intending to talk with a lot of the regulators and I mean the bus talk that I the talk I enjoyed the most is of course from the DOJ the head of the national cryptocurrency or the Enforcement Task Force.

So it's with the news that you got you know coming out and then obviously with bitrates, you know with that gosh that $29 million fine for violating sanctions. It's been one heck of a day and I love it. You know, the the legal nerd and enough all loves it. But one question I kind of wanted wanted to throw out there to see what your thoughts were do you think?

With I don't know what the other side and and and and with with Eagle laughs. Do you think they would ever have to like apply for like a money transmitter like license because of the yeah because a coin holds the value and you can turn that into you can cash that out into real dollars like what are your thoughts like around that.

If you have any.

You know, honestly, I'm.

Yeah, I I I don't have any that I think are intelligent enough to present here. I'm just not familiar enough with it. But I what I do know is that.

You you go labs and and again it's all speculation right now what's going on. I haven't seen an official source to kind of I don't know if you've seen the announcement today about the the SEC probes into both the NFT's and into a coin all all I can say is that there's probably going to be some regulation and and my guess is that it's going to happen with some of these more well known projects. I think I could be wrong but that's I I wish I had a better answer.

Than that, but again, just this this really wide Gray areas sometimes unpredictable.

Yeah.

Ohh.

I I think also, Carlos said. It kind of goes.

With the Gray area that we're in in this space? Because I've been like furiously searching every single version of CC Hugo release from some official source.

I don't see nothing from the SEC. I don't see nothing from yoga. So I'm not saying that it's fake or, you know, but I don't see any actual documentation other than maybe what was leaked. So.

Yeah.

Yeah.

Well, bloom, the Bloomberg article said that there's a spoke they spoke to or they they allegedly, they, they have a spokesperson who kind of, I guess, accepted the fact that they did have a probe. But it seems to me like it's just a request for information there. There's nothing else then other than that or that's the only thing that they they kind of agreed to.

No, that, yeah, that's what I'm saying. We, we spoke about that earlier because I said the same thing to Carlos. I said, well, it says here that they spoke to somebody, but yet there's nothing from the SEC website or even you. So we, I don't, you know, I don't know what the official source is.

Exit.

Well, because there's no decision. That's probably a request for information. It's internal.

100% I'm gonna like back everything that Ellie just said because like I've I've seen this happen before. Well, number one with this you guys saying?

Someone obviously you you won't know who because I never have all my clients on my Twitter profile but someone that I'm working with is a client and we were just kind of talking around just legal issues and and and you know to help this client out and they mentioned that something with you guys and yes it would be coming down.

And and and and so it's I I heard it and I was like yes probably true, but whatever. And so it's interesting to see it now. But yeah no I completely agree with with Ellie saying.

I truly think it's just a it's just questions like I had this happen with a client like earlier this year where yeah they said some silly stuff before they hired illegal to the press and then obviously SEC got wind of it and sent them. Yeah, just yeah inquiries and then we obviously hire A firm that is yeah, yeah, really good or really good in this area and.

They, yeah, respond to the questions and we just, we kept going back and forth for about three to four months answering their questions and they and the SEC kind of just went away and they didn't follow up, you know on, on anything. But you know they seem to want to just get a really good understanding of what we were doing, what was going on with tokens, what was going on with the Dow, what was going on with this, what was going on with that was going with the NFT's and so I imagine it's that a

You know, if the SEC also flexing its muscles because I mean think about like all they got they were so happy with the whole Kim Kardashian thing. You know, like just really going huge public. You know like would release on that and then about the whole and then you, we saw them what like a few weeks ago trying to argue with the with the nodes. So it's just like like I feel like some of it is just them trying to also mark their territory and also you know call out your bigger projects.

Kind of like, I don't know, like.

It's not legal advice or anything but just my feeling just I don't wanna say squash or or innovation but kind of make you know this growing you know environment of innovation kind of submit to their idea of what the rule of law is. But just to let you know just some listening at the the the DC Fintech week there are a lot of regulators there like one of the regulators like did say like they expect something to come out like next year around like just some type of like regulation so.

Maybe it's next year, maybe it's not the end of this year because of midterms, but I I don't think it's a big I I if.

I think it's a big thing with Yuka and I imagine.

It's probably been going on for at least a couple of months and and somewhere it just got leaked, so.

Well, let me, uh, let me kind of jump back to that then from like the business standpoint. And Mary Beth, I want to ask you because this is really your lane as opposed to all the attorneys up here.

From a business perspective, right once an issue when something like this comes out and let's say like yoga, you're representing yoga, right? You're working with you, sorry, not representing, you're working with yoga.

No.

How would you kind of handle this? Do you basically tell you go stay quiet, don't say anything or do you say, look, let's kind of just drop a kind of really simple press release and just leave it at that. Because when I'm looking at the actual, you know the coin, the value of acoin, it's dropped. So I mean me, I like, I get, I understand the legal perspective as to like well the SEC is going to stay quiet on it, we should probably stay quiet on it. But as a bit from the business standpoint, you

You have to fully explain everything. Um, but.

Hmm.

Uh, more than a sentence, I think would kind of help. Um. Also, I've been seeing a couple of tweets. I don't know how true it is that that some of the yuga holders are are selling off some of their apes already too, you know. So, Mary Beth, like, what do you what do you think?

Yeah. Yeah. Great question. Thank you, Pablo. So for anyone who doesn't know, my background has been hardcore public relations, mostly to individuals, sometimes brands, organizations, other types of communities. And I will say very quickly it would be the the emergency calls to the comms team, the leadership executive C Level Board as well as legal. It's no one says anything, responds to anything, says anything publicly, don't even respond to employees.

And then we get in an emergency war room. That's what would happen. And then from there it would be like, OK, legal, what's your stance comes, we'd have to figure out, OK, we have to do something with our own community members, which ultimately means something on Twitter, even if it's a sentence or two just about how we're dealing with the situation, right. That's that's a response in itself and that's basically buying time to, you know.

That goes back to legal it's a big comes between legal thing.

Thank you. Appreciate that.

Yeah, of course. We have a ton of hands. I wanted to give a moment to squeeze taxes. Would love any insight on this. Then I'll go to Leslie's project 1010, immersed and then drew and E money. So squeeze.

Hey guys. Uh, thanks for having me here. I don't really have much to say. In particular, part of me wants to put a tinfoil hat on right now because I have a bit of conspiracies on the IRS's potential involvement in this, but I'm not going to do that. This is not a conspiracy space. But I do have a question to all of the.

Attorneys that are in the space, and it's regarding a statement in which I saw a lawyer make hold on one second. I'm trying to find that I just had it.

It's regards to the.

XRP case, which seems that it's going to be applicable here.

Let me see if I can find it. I just had it. My apologies. I'm gonna actually mute myself and when I find that, I'll bring it back up.

Cool, no problem. Thank you. Um, I said. Did I say 10:10 or immerse next 1010? Immersed.

You said let me.

Leslie.

And then me.

Well, not Leslie.

Hello. Hello my wonderful people. I do have a question for my attorneys. I understand that this is not legal advice, more of a recommendation. So when people are building small projects, you know, there's a lot of companies that are coming into this playing field, specifically marketing type, where you are able to explore digital assets, elevate your investment experience by combining data across marketplaces, metaphors, games, chains.

Enabling communities to continue expanding into the ecosystem and you're able to move faster and make more money on certain platforms now also as part of of partnering with these companies for marketing purposes.

Your holders are able to also become an affiliate of your project, and a link is created for them where they're able to.

Promote and advertise and you are able to set an amount that if anybody clicks on that link, purchases an NFT.

Based on that affiliate you're able to compensate them in the back end or they're able to earn while you're earning as well. So at that point, is there a recommended to seek council before you embark in becoming, you know, part of that platform?

I'll, I'll jump on the sword here.

I kind of always give the the general advice, and this is not a cop, but I promise you, I always give the general advice that if you're embarking on really any type of.

New job or journey or something like that where you're expecting to to to earn a good amount of income, right?

I wouldn't necessarily think that you need to really have a deep dive look as to what you're signing up for, right. If there's no contracts, is there nothing you're not agreeing to, anything that's well, I personally wouldn't do that. If there is some sort of agreement that you have to sign and actually look over it, yes, it would help to have an attorney look over it. If you read it as you read through this agreement and you don't understand what you're reading, right. And if it's too complicat

And to have a look at it right cause especially in this.

In this specific space, we just don't know the direction that we're going in honestly with a lot of where legally it's going as of yet. And I always just say that with any major decision in life like.

You wanna have that agreement kind of tight as you possibly can. So it it really again it depends. I hate to say that, but it does depend on how the level of comfort for you, right walking into this, if you're if you just have that gut feeling that it's just not right, then yeah have an attorney look over it. If you read over it and if there is agreement in the 1st place and you read over it and it's not that difficult and you get it and it's clear as day, then I really wouldn't say there's much

Anyone else?

Dope I'm gonna go to 10 times and immersed. Ohh squeeze you, you're back, you're back.

Yeah, I I found the quote. It's from John Dean. He's the founder of cryptolaw.com. He made a comment.

He resurfaced the comment he made uh he resurfaced 2 weeks ago, a comment he made about the XRP case. He says of holders of XRP maintained their XRP on an exchange such as coin based crack and uphold. XRP holders can convert convert XRP into E BTC yadda yadda or or many other crypto currencies. This factor alone takes XRP out of the classification of a security under Howie.

And how he and its progeny investors didn't have possession or in control of its oranges or the Beavers to sell. And they certainly couldn't convert the oranges to apples.

I'd like to get thoughts on or comments on that.

Carlos, when do you take that one?

Yeah, I'm, I'm actually going to go through and read it again really quick. My apologies. Give me just a couple of seconds. Did you pin that to the top squeeze?

And.

OK, perfect. Ellie, you wanted to tap dance shakina for just a second. Let me take a look at this and then I'll. I'll gladly comment.

Everyone check up the pin tweet up top that uh squeeze was referring to just now. Welcome to everyone who came into one spaces. Please give one space as a follow as well as your host, co-host, and amazing speakers. Thank you so much to Carlos Garcia. Ellie and Pablo have taken time of their day to have this amazing discourse with us.

Dance over Carlos Pablo elli.

You know, I'm not sure that.

Are we gonna discuss Kim Kardashian?

To China.

But they were all reading it again. I think we're all reading it again.

Rereading it.

Yeah.

Yeah, like I'm I'm reading this and.

I mean.

What I would say is I know he he posts a lot of stuff around like XRP. So I kind of would take it with a grain of salt until there's resolution and and in that case and until you hear something from the actual exchanges of what to do, like that's my best take on it because I mean he is very pro. That's almost all he posted about XRP and in that case. So yeah that's my two cents.

I I would agree to that. I've seen a couple of his, his tweets and and sounds like some sort of vested interest. I'm just going to leave it at that and kind of move on.

I'll I'll just say this, I don't know that possession and control really changes anything because if you think about like syndications for real estate, you don't have possession and control over the assets. I would I would think that you have like title to like you're entitled to the the proceeds from the actual asset that is generated like whatever the asset is generating those profits but you don't actually have possession and control over those shares and Even so like some of those well again

Like you can't really trade your your interest in that that specific syndication. So I don't know that that that takes it completely away from the securities and the how we test. That's personal opinion, not sure if that's what everyone else thinks.

Thank you. Thank you.

Yeah, just I think it's just tongue in cheek. Ohh. Sorry, Mary Beth. Go ahead. Go ahead.

No, go ahead.

Yep.

I just, I think it's tongue in cheek, but yeah, that that that's all. I know we've had a couple of hands up for a while too. So thank you guys so much for bearing with us, talking about a lot of interesting stuff. And we have a lot of really intelligent people up here just to reset the room a little bit. There's a few lawyers up here if you hear anything that that I say that LE says that Pablo says that. Shakina says it is not legal advice. We're just up here talking opinion, we're talking about

Current news and if you do need legal advice, you should definitely have a one-on-one meeting with an attorney.

Yes.

That knows that specializes in the area that you're asking the question. So don't come to me about securities, don't come to me about securities. That's what I'll say.

Same. Please don't.

No, but if you want to get a dope jacket, definitely go to China. I've seen you. Wow, you've got some amazing stuff.

Awesome. Thank you. I want to go to a 1010.

Thank you.

Thank you. Very bad. First and foremost, I have to say you're 10. Dances skills are amazing first and foremost.

Chicken meat.

Secondly, I don't wanna start by saying one I have not practiced law. I have not studied law anything and everything that I say is not financial or legal advice whatsoever. But my biggest concern with the SEC is and their overreach, not just through the library case, the XRP case, now the Yugoslav case. And I say this because if we reference back the library case, there was a part in it there that they, the SEC, actually made a motion.

That utility didn't matter. If there was just one person that had the expectation of a financial benefit, that in itself would trigger the the Howie test and considered be considered a security. And secondly there there's more than just the how we test that would determine the security. We would also need to take a look at the reef status, which is more of a note in itself. But my main thing is.

At least for me, my personal opinion would be that right now they're trying to stake claim to regulations that they should be the ones in charge. And it's just.

Regulation by enforcement, which does not give any type of legal clarity. So we're all in this.

Limbo state where at least for me I would say don't ever like if you're building something, don't don't make any type of promises of equity or ownership or like I wouldn't even call anybody who purchases any type of whether it's a fungible or non fungible token and investor. Because that is the wrong terminology and that in itself can put you in the crosshairs for the SEC like your community members, their backers and whether you are doing.

Project that is kind of like a Kickstarter. Well Kickstarter hat like they have their own regulations to go abide by it and you have to also abide by those rules if that's what you're trying to find your business with or if you're doing it like a sweepstakes. There's sweepstakes regulations that you also have to abide by because one of them is people would be able to participate without any type of purchases necessary, at least in the United States. So like verbiage in this space, in the web 3 s

We have to be very cautious and tread water very, very lightly just because anything that we can't, we say can and will be used against us in the Court of Law. So definitely be careful with what we're saying. And the last thing is when, when it comes down to the, you know, should we say anything, should we not say anything? At least the way that I've seen the SEC play out has been ohh no, you're OK, you're OK and then they wait until like the midnight.

Now we're on the last day to then go ahead and file suit. So it it you really never know if they're actually looking into you to to enforce or just looking into you. Which to me if they're looking into you, they're gonna eventually enforce personally.

So three things on that really quick, very quickly before we get to the hands #1, #1 and #2. Actually I think one point me and Ellie kind of discussed this some time ago, right has and Elliot, maybe you can update me on it since we've spoken about it. Have you seen any type of discord chats that have ended up in discovery or any Twitter spaces recorded Twitter spaces that have ended up in discovery really quickly as a question to that, right, because it's very interesting to me. The third thing

Yeah.

Breaking news, we got a tweet from Gordon Garner, right, one of the founders of yoga, he says. GM good morning. So that's about it. Ellie, can you can can you drop a little bit of that on us?

We hear.

Hold on, I just want to let you know that legit, I just typed out in a discord saying never ever, ever shall anyone on the team use any of these words. And that just came out of your mouth, Pablo. So weird. Sorry Ellie, go ahead.

I've been saying this.

OK, well, I just want to hop on this breaking news.

Ohh go ahead.

No. If you read between the lines, the GM is an affirmative statement that yoga is. I'm just kidding. Go ahead, Ellie.

Yeah.

Oh my God I cannot with you.

Here we go, here we go, here we go.

Like that's all.

Ohh gosh Carlos.

Umm, so yeah, no, nothing yet. But I expect that I if I was on on either side of any kind of litigation, I would definitely be subpoenaing the records from the discord. And that's why I've always said it from the beginning. And Carlos, I remember the beginning of the year we were advising people to just be very careful what was under the scores, that we read through everything with clients so that we will read through like what the disclaimers were, what the actual.

From descriptions they were having for each of the channels, making sure that they did that even the titles of the channels were not really insinuating any kind of like a, you know, promise. But yeah, I still haven't seen that yet. But I want to see it because I think it's going to really make it kind of clear that, you know, it would be interesting. Let's just put it that way.

I I agree with you 100%. For those that don't know I'm also a retired cop from New York. I kind of dropped that bomb out of nowhere right. And in in the actual, the actual like manual let's say the Police Department, they give it to you. They basically tell you when I went on anyway that you cannot actually post pictures of yourself in uniform on social media otherwise you would definitely get penalized under the procedures and policies of the Police Department. And I that kind of always stuck w

Active than it was 1520 years ago when I became a cop and basically, you know, anything you put on the Internet, it's pretty much retrievable. So be very careful and I'll just leave it at that. Thanks, Ellie.

To specifically address the the question about the discord messages and and social media being used in cases. There definitely are situations. I don't know if you guys remember what happened with Frosties I think that was the Eastern District of New York. The the US attorney there brought criminal charges against them and in the actual complaint they had screenshots from the discord messages. I think it was a an IRS agent that had infiltrated them and and started conversing with them.

And side note, LED you, you may remember this from way back in the day, way back in the far fetched labs day, we did submit as evidence discord messages between US and another party during that case. So I think that they are probably going to be those things are going to be coming up and guys look here's a quick take away for everybody in here not legal advice, this is this is a just practical common sense guys go ahead and assume that.

Anything that you put into a discord message, into a Twitter DM, and just out there conversing with people, go ahead and and for the most part assume that it's going to be in the public record. And surely if you're in space is talking about things and I hear this all the time, Ellie UI, Pablo Shakina, you probably see this all the time too, where in Twitter spaces and people are talking way, way too much and just go ahead and consider that as as out there in the public ether.

No pun intended, and and probably fair game.

Great point, great point.

And I think most importantly, if you are in litigation or any kind of dispute with anyone, do not go on spaces, please. For the love of God, just save yourself the drama, please. We've seen that so many times. I'm like, where are their lawyers, please?

Yeah, that's happened often too many times.

Awesome. I want to go to our next hand. Who was immersed. Are you up here? Immersed.

I have. Can you hear me?

Yeah, go ahead.

Awesome. Well, thank you guys so much for hosting this space. I think it's vital for the entire NFT community being that we've been collecting this stuff for God knows how long and and I think what couple questions. One question is what do holders do like in this sense? Like if if yoga is in violation of of any of this stuff, I guess what's, what's maybe the worst case, best case for the creator and the holders are holders in are the holders liable at all?

Do we have to worry about anything? Are the creators, obviously creators followed a lot of like the yoga playbook, so they've, you know, really taken a lot of cues from them. So if they're in violation, then probably, let's say 90% of other, you know, NFT projects are also in violation, especially the ones that have been focused on the PFP vertical. So I think those are the main questions I.

My my specific like my thought goes to all these companies are at least Yuga is a VC backed company with investment of hundreds of millions of dollars. I'd be surprised if they're their lawyers, didn't foresee this and didn't foresee the SEC coming after them. So I I really don't necessarily know if this will go anywhere, but obviously if it does there's a lot of harm that can be caused to the industry. So just curious about the worst case and best case scenario. And then what about holders in t

I mean just talking from the top of my head because I don't pay attention to anything really. In the end there you go, ecosystem. But I imagine your answer would be somewhere and their terms of use, you know, whether you know there's any language around you take this risk at your own, you know, like potential peril. I mean it won't say it like that but just something along those lines.

Yeah, because, I mean, I think anyone who's buying NFTS like we're, we're taking a risk and not knowing what the legal landscape will look like.

Yeah, that's my two cents.

I think that.

To to your point about whether they knew or not, I think that GM message just tells you how worried he is about the project. So leads me to think that they probably did expect it. Or maybe this is like shakina mentioned leaked information that is owed to them and they already been preparing for this situation for a long time. That's what I would assume. Again, this is implications of the top of my head like she kinda said. And then the second thing is that they did use KYC procedures for a coin

That there's some level of you know where they kind of strategic maneuvering there. So yes, I do think that they've, they're not they, they have pretty good lawyers in their back.

Yeah, ohh.

Ohh.

Ellie, you almost made me spit my coffee out with that uh, GM line. Very, very hard hitter there. On a side note, guys, I just want to provide some very quick, practical legal advice. If you have a Keurig, always make sure that there's water in there before you hit the button. And don't walk away assuming that there's water when you come back and see that add water button. It's really inconvenient. I think I'm going to be going ahead. I'm going to go ahead and jazz up the class action lawsuit ag

Keurig so that we can get this taken care of. That is it. So I just want to break it up with some comedy relief there, guys. We're really going in on these topics.

And and.

100%.

Yeah wonderful. I ohh I wanted to add to at least point to like obviously they had time for this because we all know who those of us who are in this space know that there's a connection between you the labs and eight point out. But when you look at it legally you know like what it what you do labs is what the Delaware court you know but headquartered in Miami but they pointed out is what Cayman Islands and so.

They were planning for this, we were preparing for this, so.

Yeah.

And they established their presence and their foundation like they have a doubt. They have a council that's kind of in control of this foundation. And the foundation has a relationship with some company in in the Cayman Islands. Like they have such a good layering of like insulation to me that that's what I see it as. Like they have a lot of layers that insulate them away from, from Yugoslavia, from the Delaware company. So I don't know to me that that's very strategic and they're in their part.

That too.

That's a good point.

And that leads me to wonder if the inquiries are trying to connection between now and whatever. That's because I'm like what else? I mean, maybe it's other side, but like I wonder. But I wonder if it's 8 pointed out doing something that we don't know about yet.

True.

Yeah.

OK.

My thing that I, I do kind of get annoyed with, and I'm not gonna lie, um, but I think Brandon was talking about earlier, it's like we're gonna call the spade. Let's just call it a spade. I mean, we all know legally you're right the way they set it up, but we all know there's a connection.

And so that's my thing too is that you know, how do you, how do you, how do you on one angle say like well we don't want nothing, we don't want any enforcement from the SEC and then when issues like this pop up that they.

Legally yes it's separate but you know, the world knows it's not. So then how can one angle you argue that and on the other side you say, well we don't want any SEC action against us either. So anyway it's just it's kind of a frustrating point to me too.

Thank you. Thank you for that. I do want to move on to the next hand drew, then E money, then El Professor, then clubhouse. Drew.

Yeah. What's going on? Appreciate y'all hosting this space obviously you got some banger speakers up here, very informative I think I just want to say a few things and and definitely you know my opinion not financial advice. I am definitely an investor and owner and and many you get assets and and every aspects to kind of preface with this. But you know everyone on this stage I think I've seen this a lot on on Twitter and and in discord is kind of going through everything, right. I mean you real

Like a lot of people are just retweeting this kind of starting Twitter spaces, you know, really for the purpose of engagement farming or acting like they're experts when they really have no idea in their background has not to do with the shit and kind of, you know, spreading misinformation and it really kind of causes, you know, adverse effects. When you know people are at work and they see this, they read that and then you know, they make emotional or irrational decisions purely, purely based o

I think we've seen obviously the SEC start to make moves, uh, you know, coming after the the top dogs and kind of playing the fear card, right? I mean, we saw with the Kim Kardashian, that's a whole other story, right, whether that was?

True or not true. I think there's a lot of opinions based on that, right of, you know, whether what they did is wrong, but you know, you're not gonna see them going after, you know, two or three little micro influencers or two or three little little projects. Because they're obviously trying to, you know, establish their dominance in a space to where I think they don't even fully understand it as much as we're trying to figure it out. Right. Like, you know, we can't sit here and say that the SEC

Other cases previously that are referenced to this one what's the case that we can reference here Ripple which isn't even even even finished in a probe or an investigation until what I think they said Q1 of 2023 to kind of formally announce something. So I think we're definitely treading in Uncharted you know waters in a way and.

I think I can't remember who said that someone said this analogy. It was like if someone were to come into the United States and impose a law that you can't swim after 9:00 PM at night.

And then the SEC was gonna probe to see who was swimming. Everyone on the east and West Coast would pretty much, you know, try to abide or not abide by that. And then you have the people in the the middle of the United States and you know, like the fuck what? Like what do they mean swimming, right. And there's a lot of questions because there's broad kind of statements being done because they don't know themselves and how they can impose that or enforce that because there's no regulation stated

Comes this kind of conundrum we see here. Now my question for all the speakers on on the stage definitely and this is where my confusion and maybe it's obvious or other people have this in the in the crowd as well as you know obviously you got a point they created a Dow and a Dow for a reason right. Whether they discovered loopholes whether they you know kind of went around or or abided by other things. But don't you think that somewhat of you know eight coin launching and then being listed on e

The day of it launched and for people to claim claim their their account it not being airdropped not other aspects especially being KYC with other deed and other aspects as well, right? Don't you think that they had to also prove or pass some kind of verification to all the exchanges as well that they're not a security and that's why they are listed on that? Especially because the big one that stood out to me when they got listed on Coinbase is that it was coin based experimental platform right.

I would agree with that.

Yet so.

I actually go ahead, Carlos.

And Ellie I don't know if you remember it. Oh well piggyback on this please. I don't know if you remember this was several months ago we had gotten we had a situation where a client needed a memo drafted. I can't I think it was bitmart for the listing but it was just it was a legal opinion basically on whether something was a security or not and you know his attorneys and this was this was way before we we actually even had some of the the the new announcements and.

Students that have come out up till now, we drafted a memo that that basically it didn't say definitively whether something was or wasn't a security. What it said was, here's the analysis, here's the existing framework. These are the aspects that may be construed as something being a security, and these are the reasons why it wouldn't be a security. Do you remember that?

I do, and I also yeah, I I do remember that.

Yeah, so I and.

But I think that they some of those. Ohh go ahead. Yeah. So the exchanges where we're just required that's it was a low bar to in my opinion.

Yes, no, you're you're absolutely right and and that's.

Thank you for bringing it full circle. Yes, there probably was something that needed to be done and submitted prior to the listing, but it's like.

And and look truthfully any attorneys opinion that writes something like that, it's not like you can go into court and say, well, I didn't think it was a security. So it's definitely not a security. It's just more of an it's an objective analysis of the, you know, the frameworks that we have. So yeah they probably had to do something was it, was it a lot? I don't know.

I'm guessing not based on my experience doing that for another centralized exchange, but yeah, good. Good point though, Drew.

Yeah, yeah. Because I think, I think it's just super interesting. I mean obviously all of us here, I think everyone in this whole entire space can agree that by the grace of God, religious or not, right. You would imagine that Yuga taped out the OSCE, other entities, parent entity have the best lawyers on the planet as much as they can, right. So now if they're going to try to make an example out of board app.

And they're all in compliance departments and and so they're doing their like research and making sure that their own exchanges staying compliance, you know, with yeah, with laws that they have to, you know, with you know, federal government laws. So that's all I want to add.

Yeah. And I I think that's all, that's all kind of affirmation, right. Like I don't think there's any negative connotation really associated to this. I think there's negative connotation if you don't understand, you know the purpose of like a pro from the SEC, which they're literally just doing their job. Like they're making sure that they are indeed regulatory. Like it's not always just negative. I think obviously everyone thinks it's negative because the example we have from went through crypt

Or a recent times right is you know the ripple and obviously Ripple you know kind of got delisted or you can't really exchange it other places. And maybe that was the fear of dropping eight coin and other aspects too. But I mean I think you know realistically what's what's going to happen from this is or at least my my hope right. And I'd love to hear y'all's opinions on this is you know the end result, right there has to be some kind of conclusion or there has to be some kind of formatted legal

That's reference moving forward. I personally think opinionated every single time for everything else in in this event of whoever else they go after.

I think you think too highly of the government I they could they could leave it so open-ended that we we don't get any clarity. So I I hope there is some clarity but God knows the the way our government is going we'll we'll see if that happens.

Yeah.

Hope is a hell of a drug.

I.

I do want to say that the the first thing you said which is the smartest thing I've heard all spaces is we're speaking from opinions and we often speak very assertively. So like let's make sure to say this is our opinion and nothing here. You know things could go completely 180 tomorrow because we have no idea what the government is going to do. So yeah creating kind of this kind of you know market kind of chaos is not really helpful to anyone. So I do love that you said that because I I do see

Engagement farming and to me that's that's so detrimental to the market instead of kind of uniting the the whole space and we're already a small space instead of instead of doing that we're creating chaos. So I agree with you with that. So just didn't want that to be remised.

Thank you for that, Ellie. You needed to hear that E money, then clubhouse money.

Yeah. So I actually, you know, I think that having conversations like this.

Are very, very important, whether they're divisive or not, because there's a lot of people that are here and will be coming here that will not have the benefit of some of the knowledge that the people that are on stage like this will. And having these discussions allows that knowledge to proliferate downward and allow people to go do their own research or figure out who they should talk to and form their opinions.

That being said.

I do have a question for the lawyers here because this is an exact example of what I was just talking about. One of the first things that all about that how test is that it has to be a common enterprise. I think the argument could be made that in the example of for Carlos using that mutant right now as a potential brand for himself.

It it's not a common enterprise and I feel like that. Like I guess my question is 1 is that a valid argument? And two, who gets to have those arguments with the SEC or do they just get to decide what is their purview on their own?

Before we answer that matters, lawyer is also down in the state, in the in the audience. So I know we we're kind of at a cab, but it would be great to have him up here because he has some really valuable experience.

And.

Absolutely. Please feel free to request um, if you're down there, are more than happy to have you on. Thank you, Ellie. And now.

How the can I speak really quickly to that comment enterprise Mary Beth?

Yeah, of course.

It's very difficult to argue against the common enterprise here because of the fact that they actually created an entity. There's actually a company created there you know you go to website they're hiring people and and so I would I would be able to kind of argue against that and and say well if you're telling me there's not a common enterprise you know you file the copyright I'll be filed trademarks as well. So I mean you can't, you kind of kind of have it both ways by saying we're not a common

Of a common enterprise at the same time.

Yes. And and also really quick, uh, Brian thanks for joining us up here. Brian's also another lawyer in the space if you hear anything as well just please feel free to hop in and and give us your input. Do you have any any feedback on the common enterprise and and sort of that analysis?

Uh, not too much more than Pablo already mentioned, but thanks for having me up here. I'm kind of listening in still kind of half doing work. So I'm trying to focus in a little bit more here so I can provide some value. But I do agree that I think so. Again, I'm not a securities lawyer. I'm sort of coming in from various practice areas. Traditionally did litigation, which I foresee a lot of coming down the Pike in this area, but not to be negative, but with the common enterprise.

I mean.

Just offering a license that allows commercial.

The commercial license to use that in branding, I don't think that rises to the level of control that would be part of a common enterprise. So that's just my two cents on that. I don't think that quite is enough.

And I, you know, I wanted to throw this out there, right? Um, you know, in order for it to be considered a common enterprise that that implies that.

Like for example, Yuga doesn't have control of the apes that it has. Like everyone has IP rights on that as far as I know, on their individual apes. So when you're buying that, are you actually buying?

A part of Yuga, since the actual ape itself doesn't confer any sort of control like that. That's where I'm kind of confused here.

Ellie, do you want to touch really quick on on what that the license means and and sort of some basic?

Well.

You know, things that we look at in in these IP licenses.

I just don't think they're they're I don't think they're related to the query that we're having here. So like the common enterprise and issuing the license is just the issue of the license and you and I both work in the same lane. I don't think that's going to be brought up and and determining whether there are common enterprise to be quite honest with you that's just functions of the business that you you have a set of entities that are tied to to copyright that you've licensed but I don't thin

The issuing of the license is going to be part of that query and she kinda you if you want to add anything. That's what I think.

Yeah. No I I I would agree with you and I would agree with with with Brian like it's it. I think it be completely separate and they I I I just don't see them. Yeah I I it would shock me if the inquiries had anything to do with them yeah with the commercial license I think it's more you know in regards to just like yeah the inner workings of of the business like that would make more sense to me but you know we don't know and and and I'm just assuming.

Yeah, we're kind of all in the blind here but that I agree. Just no, no clue that that will ever come up with that and they comma enterprise question.

Amazing. Thank you so much. I did want to go to James from clubhouse archives, who you know does.

Involve him, his community with communities we're talking about today, James.

Yeah, thanks for First off, um, I'm appreciating the conversation here, although I have no idea what's going on. I've been in LA for the past today's meeting with.

Factories and suppliers. So um, I'm assuming the SEC has filed something against Hugo Labs. Can someone first explain?

Um, what's going on? Because this isn't. Yeah.

No, no, no, no, no.

There's been no decision, no filing, no record. It's just someone leaked some level of information that came up and then Bloomsburg or Bloomsburg or whatever article and it just says that they spoke to someone from Yuga Labs that that's basically all the sources we have so far. If anyone wants to kind of do a room reset and kind of read exactly what who they're querying and why they're querying them, I think Carlos, you were reading the story earlier, so if you wanted to do a quick room.

She said that would be great, so anyone that came in late knows what's going on.

Sure. I I do want to say thank you so much to the 164 people who are in here joining us today. This is hosted by one spaces, so please give them a follow if you want more dope spaces like this. I'd also like to thank Carlos Garcia and Ellie and Pablo and Shakina for being up here, as you know, legal professionals who are not giving financial or legal advice. And thank you to all of our speakers here. So don't forget to follow our host. What's up to one mint?

Down there, they've made this all happen. So Carlos, if you want to proceed with a recap.

Sure.

Uh, just before that I just wanted to say thank you. I just, I gotta run. I actually gotta get to a meeting about 2 minutes.

Appreciate everybody. Thank you so much. Really interesting conversation. Super great guests up here. Thanks for all the questions. Now I'm not going to sleep tonight because I'm gonna be thinking about this all night. Thanks a lot.

There we go. Go ahead, look, Carlos.

You're welcome.

Yeah. So, so just to reset the room a little bit, I know we've had some people come in and out. We're up here talking about is a press release that came out there. There's several out there, but primarily the coin desk press release that referenced an SEC probe into both Yugo Labs and their NFT projects as well as into eight coin which is is is owned by a completely separate entity. The sources that have that have opined on this are not identified. There has been no official press release.

OK.

From the SEC or from Yugo Labs, so take it with a grain of salt as we're up here. Like Ellie said earlier, we're talking opinion. Nothing that we say is legal advice, but definitely some good conversation to be had about something that has not been touched on enough. Go ahead, Mary.

May I refine your statement a little bit? So this is not a press release. Press releases are official announcement announcements that come straight from the organization organization themselves. These are articles, journalistic articles, editorial articles that have been released, for example by Coin Desk that merely narrates what they have learned on the record, but not an official press release from labs.

OK.

OK. I appreciate that. So because I'm like you gotta so somebody said something earlier that actually now means makes a lot more sense Now I understand why you'd said it. You know it's funny. I've been away from the space for a couple of days. This is the first space that I've been in I I hop in the way things are being discussed and being framed. You would have thought that something had come down. So I think I I just yeah that was my perception given what you just said.

Yeah, I think.

You know, the only statement I'll say is if we don't think the SEC is probed quite a bit on what's going on in the NFT space and in blockchain technology, we're all fooling ourselves. I I think there are probably people in most spaces that that are from some sort of organization to better to better understand just what's going on. So I don't.

You know I don't want to say it's a nothing burger but I just think that OK that makes me feel a lot better because you know look what we're doing is is I've tried to I've tried to approach our business and and in the most sensible way that I I thought it would make sense to avoid any of this kind of.

Scrutiny from from larger government organizations, but even that probably has exposure. So yeah, I just caution sometimes around these conversations because I literally walked into this thinking that the way it was being framed, what I was listening to had me very nervous as if something had come down. So I feel much better. But anyway, appreciate you bringing me up. I'll continue to sit down and the listeners and and enjoy the conversation.

Thank you for joining us. We appreciate that, drew.

Yeah, just wanna just to ask a question kind of out loud here. I got two DM specifically that they want me to ask because I don't want to come on the stage is, you know, is this true, right. I mean, like I know this is a late screen shot and they're pretty much asking like, is this real? And like get this, if this isn't real, I mean I definitely think some Anon is about to get a wake up call, right? Because me personally, I keep refreshing Nancy Paloski's Meta mask wallet and I haven't seen her

Sure. What's going on here? But yeah, they're pretty much just asking. I mean, you know, since it was just a a leaked screenshot, I mean, what's the probability? This is just a manipulation of social media and we all need to kind of wake up a little bit?

Yes. And and Speaking of that I just had John thank you for for texting me this.

There was just a tweet put out by Garga saying something weird going on with other side meta Twitter account and saying that I have to say this but don't trust anything coming from that account for the time being.

Sometimes I don't know if this is all lore and part of the story and the saga, or if it's genuine. I yeah, so just.

Another little thing there and as as we're having this space, I've been kind of following the the different yuga collections out there. Definitely I think this has at least in the near term affected the, the collection values. The floor price on mutants is down at 14 now, so you know we'll see it. We're in a very reactive environment. So just take everything you're hearing with a grain of salt because still nothing official.

Have been put out? Go ahead maybe.

Yeah, now keep on going. I was just going to go to some raised hands unless he had more to say.

No, no, please, please. Let's get the hands.

You got it, Renji. What's good?

What uh, so this is a this is obviously very interesting to us as well at context for those you don't know me, I'm. I'm the CEO of that other icon right there says immersed. I think Mina is running immersed right now. But yeah, so I mean context on us. We we actually did a crowdfunding campaign and we there were some scares around Ohh. Like what does it look like for us to have to go through certain SEC regulations around crowdfunding because you know it. You know we're not a public company like

There was a couple different ways we could have gone through that sort of crowdfunding thing. You know, using regulation CF versus sort of like a regulation a sort of thing where you essentially have to register in every single state that anyone who invests your company like lives in period meaning. So say for example if you know if we were to release a cryptocurrency that ends up being you know, ends up being deemed as a security or even you know, virtual property or any sort of entity or anyth

A question for the lawyers.

Is the penalty for Yuga ultimately? Oh hey, now you have to like register in every single state and you have to do KYC on every single holder. Like I guess what does that look like? Obviously there's gonna be fines and I'm sure that can vary. But what if if you go wants to continue doing this thing, right, if they want to continue, I guess saying, hey, these people, these are people who are loyal to our brand, these are people who really kind of push the needle forward for yoga or board ape or t

Taking a financial hit from as far as a high fine goes, and then also having to register in every state or every country. Like what does that look like if they're found guilty?

You're talking about the blue sky loss.

I think that.

Good.

Well, he's like about the blue sky laws, Carlos. And I think that you know if you if there's federal law for its securities, federal law and there's also state, federal, I mean state securities also if they could also be sued by specific states. So states have sued in the past before and SEC hasn't like the federal government hasn't gone after certain projects. So Carlos, do you remember what we spoke about that New York project, I think it was a casino that got sued by state for violating their

This is positive and I would say that they if you're it depends on who you're targeting. So like if you're targeting investors then you have investors from all over the states, then yeah, you probably have to register all over the country.

But Carlos I think you may may have, I may have cut you off when you may want to talk about this. But the, the, the, I guess the the repercussions for yoga will be more than just fines. It could probably be disgorgement of of some sort of like a gains that they've had in Carlos. You may know more about the actual consequences of it.

No, that that was pretty much everything. And then you know I'll also say just again with a sort of a grain of salt and this is one of those areas where I, I would love to have a a lawyer who's litigated some of these things post enforcement action which is different than providing strategic guidance on the front end. Kind of talk about what they've seen and what some effective strategies would be to.

You know to insulate their company as much as possible once those come down. I can speak for me personally, maybe some other of my fellow attorneys up here. I don't have experience in the post enforcement, but definitely in advising prior to launch and things of that nature. So I think everything Ellie said was on point to the best of my knowledge. But if there's a securities attorney down there that's that's litigated and taken one of these post enforcement would be great to hear from you.

Well, I saw Rodrigo's hand go up, do you know?

Yeah, I can. So I can jump in. I'm Rodrigo. I'm part of the legal team at a paradigm and I'm not enforcement lawyer, but I am a securities corporate lawyer. I think just to to clarify a couple of the things that have been said, there are state blue sky laws that apply, right, but when you register.

Security with the SEC. All this.

Well, depending on what registration you do, but most of them they will preempt.

State securities laws, right? So you don't have to do both.

And then I think the the main penalty right that.

Issues of unregistered securities are liable for is something called rescission, which is basically the purchasers of the unregistered security have a right to like put it back to the issuer. Basically you would have to buy back all of the unregistered securities that it offered.

What?

Would it be at market price or would it be at where they got in at?

When they at the price they originally sold them at. And then you can also tag onto that, you know things like penalties, disgorgement, potentially like label you a bad actor which would prevent you from taking advantage of securities exemptions and other things. But I think taking a step back, I frankly think this is kind of a non story if you look at the Bloomberg story that broke this.

They it makes it sound like it's basically just a request for information, particularly like you guys response to this was saying something like you know they were.

Cooperating with regulators and everything and I mean frankly for those that have been in the space advising clients like.

Everybody got these like six months ago, right? So it it doesn't feel like like a huge story. I think the real kind of.

Uh thing to point out here is somebody leaked this and you know, not pointing any fingers, but it's probably somebody, you know, in one of the three letter agencies. So I think I see this more as just.

Frankly, like the SEC continuing on its marketing or like publicity tour and trying to seem tough here.

Yep, those are my two cents.

Thank you for coming because we weren't talking here. I'm definitely not a securities attorney, so we're super happy to have you. That's a little I know about securities, but we're really just glad that someone joined us that actually knows what they're talking about. And just to follow up on that, what would be the repercussions if they violated any state like securities laws?

Supposed to just, you know, set going after them.

OK.

So I think basically the remedies are the same, right? But.

You don't. You don't really see States and the SEC piling on typically, although you might see that.

In some cases, but my point was more to say that like if you register.

With the SEC like you don't also have to go register with the states.

Awesome.

Yeah.

Thank you for that. Yeah, I'm, I'm glad we have someone that would ask questions to. So Rodrigo, I'm sorry we're going to be piling all the questions to you now.

Yeah.

I do have a question for EMS. If y'all don't mind and I'm going to read as is, what's the legal difference between buying and reselling NFT's versus sneakers or traditional art using secondary markets? Is it the fact that traditional retailers don't insinuate the potential for resale opportunities and.

Depends on how you look at NFTS and and but I'll top it on that in just a second. Jesse, welcome up here. Gosh, we have a lot of really talented attorneys up here guys. Let me reset the room really quick. We, we have a bunch of lawyers up here talking about stuff. Nothing that we say is legal advice. Please do not take it as such. If you need legal advice, talk to an attorney one-on-one with that. Jesse, welcome up man. You have any input?

On the on that question there that Mary Beth just threw out.

Um, yeah. Again, I'm not even a securities attorney. So you know this is a very specific area of law so I can just speak in generalities but but anything can be a security depending on how it's marketed is, is functionally kind of how this breaks down. So yeah, of course you know there's certain things that are obviously made specifically for profit. So when you're buying stocks you know, you expect they can go up and down. But the original Howie test and I'm again not an expert, was just based

That can go up in value based on someone else doing the work, right? So again, if you open your own restaurant and or you and three friends are opening a restaurant and one of you is the cook and one of you raises the capital and the other is like does whatever they do, you know, that's why it's not a security because you're all doing something right. The whole idea is that you're basically investing in someone else's work and and they're basically saying give, just give us money and we'll do th

I mean, it could be baseball cards, it could be anything. It could be, and in fact it is art, I think. I think we've all seen in the NFT space. Or maybe you haven't. The of course I get the name of the company, but you can invest in real art.

They used to have ads on Twitter all the time. You invest in actual paintings and they and you can get invest in a fraction of them, right, because we all can't afford an expensive painting. And those are securities they register. Those are securities. I wish I could remember the name of the company because I think we've all heard of them. But yeah, anything can be a security the way you package it, which isn't like scare everybody that like every time you sell something it's a security. But I m

EBay has to be registered as a secure security, whether it's a toaster oven or a baseball card. But yeah, it's the way it's packaged, and so most things aren't packaged. It's purely an investment resale vehicle, right? You buy a toaster even if you kind of resell it.

You're using it for toast. You know, you buy a, you know, tea sneakers for most people you're wearing them. The fact that you that they go up in value is is kind of incidental. So again, very general answer, technically anything that can be a security. But I think we all, I mean I know a lot of people are kind of very hostile to regulation here and this whole like thing is scary. But it's like, let's be honest, guys. Like we're mostly here to like flip these NFTS to make money. That's why I'm he

Sure, like that we we could we need.

Well, you can, but like but at least that submit.

Some people do it for the art. Some people buy it for the art. Jesse, I'm sorry. Or the utility.

But let's admit it's not. It's not like sneakers or T-shirts. Like there's a really big financial component to this.

But it could be that's a generalization, so I would disagree.

Yeah.

Uh, I have some Tiffany dunks, by the way, that I definitely hold on to, and I even flipped a pair in the past, just FYI. But I hear what you're putting down, Jesse.

Yeah.

Rodrigo, I actually want to hear his opinion on what makes a security, you know, like cut painting by itself, just be. It's not. I don't think it's just the way you package it. So I made disagree. Go ahead, Rodrigo.

So I think the put a little bit of a finer point on it, it's not the expectation. Like it's not only the expectation of profit that turns something into the security, right? These people obviously buy collectibles, people like commodities with an expectation that it's kind of go up. The thing that really gets you in trouble is when the issue is creating expectations that they're going to do work that's going to drive those profits, right. The SEC has definitely like integration like it says so.

So if I was going to, you know.

Is it cutting off for everyone or just me?

It doesn't make them so, he says. Market.

For me too.

Yeah, you're.

OK, Rodrigo, you're running a little bit, but we would love to hear so.

Sorry, this is.

Uh.

A little bit.

Yeah, it depends, but no.

I like the honesty, Mary. I'm sorry I had to say that.

Hey, feel free to um if it gets better by leaving the space, we'll we'll pop you right back up here if that helps.

Yeah.

Yeah, alright.

Can you say that again?

I like what he said, though, that to differentiate between the expectation of profit and the expectation of work that creates that profit. I think that's a really key point that we forget. Rodrigo, are you back? Do we have you back? Yeah, I'll let him say.

Yeah, it's pretty bad.

Yeah, yeah, sorry, sorry. So I was on trying to do it on my headphones.

We lost you again, Rodrigo.

They appreciate, but.

Did you try again? Sorry.

I think we're have an expectation of you talking in that this is getting to be.

Difficult. Should we marry? I don't know. If you wanna bring him down and then bring him back up, maybe that's easier.

I just did that. Um, we do have a couple more people up here. I did have a question. It does shift a little bit away from yoga, but it had to do with the Kim K ordeal. But I do want to welcome our new speaker up here. I want to say July. Or it could be totally Julie. I don't know.

But if you have a question, we welcome you.

But while we're waiting everyone, let's give one space as a big things. Hit them up with a follow or some comments in one of their pin tweets and their feed. This is what it's all about. We know we're launching some bombass spaces to get, you know, healthy discourse going more often in Twitter spaces. So the people you see up here on stage, give them a follow, you know, connect them with other friends comments in their tweets because that is what we do.

Welcome. You did not make it up here, OK?

Ellie, did you have more to follow up with that?

No, I was just reemphasizing what he said because to again mention what Rodrigo was saying is, is he not just the expectation of profit, but the expectation that someone's going to do that work that's going to generate that profit. That's important to note. So going back to the, the purse example he was mentioning, I think he said that, you know, it's not just that you're buying the, the person with the expectation that it's going to increase in price, but that's someone else is going to work so

I think that's a really key point to make, not just how you package. So sorry Jesse, I disagree and I'm going to agree with Rodrigo that is about that that other person working in order for your whatever you bought or whatever you purchased that it's going to increase in price.

I do have a question if I may shift a little bit. So I did pin something up top. So uh, per the SEC's official Twitter feed, it says today we announced charges against Kim Kardashian for promoting a crypto security offered by Ethereum Max. Without disclosing the payment she received for the promotion, Kardashian agreed to settle the charges, pay 1.26 million and cooperate with the investigation. So I know this is on a larger scale, right? She's known around the world.

Probably got a ton of money, like a lot of money to help, you know, promote this maybe as I don't know how it works anymore. Are they considered talent, like on a commercial or are they now in this case, like consultants or contractors? And my question is, it has to do like there are a lot of people here on Twitter, whether or not we're not, you know, people consider them influencers, everybody here, even if you're listening, if you've ever put out a tweet and someone's engaged with you or even

That, in my opinion, is arguably influential, right? Doesn't matter. Matter. What you're following is anyone can have some type of influence on some other person. My question is like, OK, so the people who often host spaces here, I mean what do they need to look out for? Or, you know, do do people who tend to promote spaces, people call them marketers, people call them host influencers, whatever the word is these days, right?

What are the obligations of that individual and how are we supposed to know?

Carlos, Ellie, Brian, Jesse with.

I'll just this isn't really my my specialty, but I do know that the key thing here is if you're paid or given something of value.

In exchange for promoting the product, that's where you have to say somewhere that I was paid for this and I believe the rule is you actually have to say how you were paid. I don't know if that varies by state or on the federal level, but I think that's the was the key, no, no, but I'll let others more experienced in that area adding.

Like is this just a web three thing I mean?

No, it's.

No securities.

No. It's everything. It's is an Ellie talking point. So I'll defer to her you. But no if you're getting paid you just have to say in an appropriate form that you were it's promoted. It's like #ad #promoted, #collab right there. That's the FTC and the and the federal regulations have some pretty straightforward rules. You just wouldn't know it from following web three. But you see it all the time especially when it's a native native deal. I mean the Kardashian thing is a little more complicated b

It's for Walgreens. Like sometimes you can get away with it if you're so famous it's obvious that you're promoting something but really almost all this any any influencer. You see it all the time especially on Instagram. Yeah you see hashtag ad if it's a promoted space so if you're paid yeah you need to promote it and none of the web three people even the I don't think I've ever seen it on a well I'm serious I don't think I've seen it one time on a web three tweet a person saying I'm promote you

I'm gonna nifty morning space nifty alpha and they always say you know we have a sponsor say so that's appropriate to the audio of a Twitter spaces. But yes this is not just a web three thing. This is like if anything it's it's a very clear web two thing that Web three is just completely ignored. Sorry Ellie, I went too long.

Sure. No, no, no. This is great.

No, you're fine. That's good. Yeah, you're, you're completely right. The FTC is kind of the the regulator for those advertisements. But SEC has specific rules when it comes to investments. And because this was specifically investment, they have a marketing rule and actually I think went to effect like 2020, if I'm not mistaken. But they have very specific rules about that. And she violated that because I think she did have a hashtag that said add or something along those lines, if I'm rememberin

For the Marketing Rule Act for securities. And I wish Rodrigo was here. Ohh, he's back. I would love for him to like kind of expand it if he wants to. But for my understanding she had to disclose how much she was paid because specifically this was an investment and this wasn't just a regular ad where like she's you know silly promoting on their or endorsing shirts or purses. This was specifically an investment. And Rodrigo we're talking about Kim Ki don't know if you caught that but.

Basically the marketing rule under the act.