On January 30th, the cryptographic court celebrated a victory, and the Foreign Securities Trading Federation (SEC) recognized at the hearing on precautionary measures in the LBRY case that the secondary market sale of its LBC coins was not securities market sales. In SEC's lawsuit against Ripple, John Deaton, who appeared in court, was excited and made a video of her hosting the CryptoLawTV channel program on Twitter that night.

Deaton, a good friend of the court, was actually an amicus curiae in the case, and he was talking about a conversation he had with the presiding judge that day. "it sounds like everyone should stop pretending. Secondary marketing was a problem, and then I gave him the Lewis Cohen article, "Deaton recalled."

Deaton refers to the graduation thesis "the inevitable shape of the Securities approach: why replaceable data encryption assets are not Securities" by Lewis Cohen, Gregory strong, Freeman Lavon and Jennifer Chen of DLX Law firm co-founded by Cohen. Deaton praised the thesis when it was submitted in the Ripple case in November 2022, in which Cohen was also an amicus curiae.

There has been an increasing number of discussions around this newspaper. The report appeared online on December 13 in the preprint library Social Sciences. When Cointelegraph spoke to Cohen in mid-to-late January, he said the article had the largest number of registrations in the site's securities law category, with 353 free downloads in about a month. Over the next two weeks, that number more than doubled. This document still leads to concern in popular legal news media and blogs related to login passwords. Its unusual name is a salute to James JoyceUlysses.

Cohen's paper carefully analyzes an immutable saying about the method of logging in password securities: securities are not oranges. This refers to the Howie Test, which was created by the U.S. Supreme Court in 1946 to identify securities. This paper makes a detailed analysis of the Howey test, and puts forward a method to replace the use of the test at the present stage.

When Howie met Cohen,

Not everyone can use the Howey test for data encryption assets, they often make up lies, and the test is effective at the level of litigation fraud, rather than as an auxiliary means of registration. Cohen previously allowed this view in his blog on Feb. 3. Even so, the author of this article is not skeptical about the use of the Howey test in login password assets-the test comes from a case involving Orange Mountain Forest.

A short summary is not close to the depth and breadth of the analysis of this paper. In more than 100 articles, the author discusses the relevant policies of SEC and examples related to login passwords, related examples, securities trading decrees and blockchain technology, plus accessories. They checked 266 federal prosecutions and Supreme people's Court rulings-every relevant case they could find-to get his results. They invited the public to import all other relevant examples into the page in LexHub GitHub.

The Howie test consists of four basic elements, often referred to as plugs. According to the test, if the sale is (1) a financial project investment, (2) an investment in most companies, (3) the expectation of profit, or (4) from the diligence of others, then buying and selling is securities. All four basic test conditions must be met, and the test can only be used retroactively.

Cohen and his co-authors made up lies in the most basic brief that, except for assets designed to be securities, "replaceable data encryption assets" did not conform to the concept of securities. This is also the judgment captured in this saying about oranges.

The authors of this article went on to say that giving data encryption assets in the primary market could be the next security led by Howey. However, they stressed, "so far, Telegram, Kik and LBRY are the only comprehensive newsletters and rulings related to login password fundraising market sales."

They were referring to SEC's lawsuit against the instant messaging software Telegram, saying that the $1.7 billion initial sale coin was an unregistered securities offering, a decision that was beneficial to SEC in 2020. SEC's case against Kik Interactive also involved representative market sales and made a ruling in favor of SEC in 2020. SEC still won an unregistered securities market sale case for LBRY in 2022.

The major breakthrough of this graduation thesis should be the viewpoint of buying and selling data encryption assets in the secondary market. The author believes that the Howey test should be used again for login password asset sales in the secondary market, such as Coinbase or Uniswap. The author wrote:

Foreign securities regulatory authorities try to deal with many problems caused by the occurrence of data encrypted assets.] The Howie test can generally be used for this kind of asset transaction. But, [...] Regulators have gone beyond current legal cases and made it clear that most of the replaceable login password assets are "securities", a view that will give them geographical jurisdiction over the vast majority of activities that occur in such assets. "

The author claims that data encryption assets are not easy to reach the definition of Howey in the secondary market to some extent. Just having an asset does not establish a legal fact between an OTP user and an intelligent contract that initiates the creation of OTP or a line of entities that raise money from other parties through marketing OTP. Therefore, secondary trading is not in line with the second Howey branch, and the latter must be a third party.

Through an in-depth investigation of the decision-making process of Howie, the two authors concluded:

"at this stage, the relevant 'project investment contract' law is groundless, and the vast majority of exchangeable data encrypted assets are classified as' securities' during the second transaction, because there is generally no project investment contract transaction."

What does all this mean?

The effect of the position of this graduation thesis is to separate the issuance of tokens from buying and selling in the secondary market. According to the industry report, the establishment of tokens may be securities trading, but then trading transactions are not necessarily securities trading.

Xiao Zhan Coughlin, head of the law firm Bressler,amery&Ross, said in an interview with Cointelegraph: "I think he (Cohen) is working on the fact that the issuance of tokens will be controlled and he is trying to clearly come up with a way for tokens [tokens] to be bought and sold in a form that will not be regulated."

Coughlin's friend Christopher Vaughn has reservations, saying that some parts of the report are "dishonest".

"it ignores the fact that every friend who has traded with a login password before knows that such working capital pools and such fragmented exchange transactions will not occur unless the issuer of the OTP provides help for them," he said. "

Even so, Vaughn may have praised the document, saying: "I hope this document will become all of the login password."

Robert Montague, a lawyer at Montague, a law firm dedicated to data assets, told Cointelegraph that the custody challenge could complicate Cohen's arguments, especially how his own escrow of data encryption assets affects Howey's investment priorities.

Montague recognized that the academic quality of this graduation thesis was very high, and called it:

"at the level of securities law, this should be the most eternal conceptual work in the industry.] It naturally began with the suggestion of the harbor of Hester Pierce's mind.

In the final version of the proposal, the SEC committee Pierce proposed that Internet real estate developers be exempted from the registration provisions of the federal securities law for three years to "promote participation and development of a fully functional or fragmented Internet."

"one thing I love about login passwords around the world is that it's competitive," Cohen told Cointelegraph. He said he hoped to "improve the level of discussion" with the document. In the public reaction, itself did not find too much friction resistance. But there are also people who show cynicism.

"you are a novel writer. You will think that there is a better legal interpretation identifier in the login password, "one Internet developer commented on Twitter."

A financial information services management said on LinkedIn: "the wise choice of legal advice is very rare on and off SEC advice or inspection cases."