Legal

In July, the Securities and Exchange Commission issued a ruling that some of the “coins” offered during recent ICOs are actually securities, and thereby are subject to the agency’s regulations. By offering dividends and profit-sharing such companies failed the Howey Test, created by the US Supreme Court for determining whether certain transactions qualify as “investment contracts.”

The Howey test consists of the following:

• Is it an investment of money or assets?

• Is the investment of money or assets in a common enterprise?

• Is there an expectation of profits from the investment?

• Does any profit come from the efforts of a promoter or third party?

Unlike other tokens , GNC is a utility token and its purpose is to facilitate services (copy- trading ) on the GERINO platform . GNC is not backed by real assets (such as real estate) and doesn’t grant their holders any dividends. As Tim Draper mentioned in his open letter: “If the purpose of a token is for societal transformation, and all proceeds go to the support and development of the token, it need not register.”