Cryptocurrency has been around since 2008, when Satoshi Nakamoto published his paper called peer to peer electronic cash system. In that paper Satoshi described a peer to peer cash transfer that would not go through a financial institution.
Ethereum was formed to overcome technological limitations of Satoshi. Vitalik and his small team of developers created ethereum as a platform for building decentralized applications. On Ethereum he could build token systems which are:
• Sub-currencies representing assets such as USD, gold, company stocks
• Individual tokens representing smart property, secure unforgeable coupons, and even
• Token systems with no ties to conventional value at all, used as point systems for incentivization (reward systems)
This requires a comprehensive understanding of money.
Cryptocurrency continuing popularity brings with it concerns of different kinds. This document aims to look at the correlation between cryptocurrency, money and law. Most developments on blockchain have been created in a manner that tries to evade the law. We need to find out where they intersect, where they find common ground.
The ecosystem of the modern economy requires the polymath. Polymath is a person whose expertise spans a significant number of different subject areas. That is where law, business and blockchain meet.
Ubrica stands for Ustawi Biomedical Research Innovation and Industrial Centers of Africa. It is a life science and health production (LSHP) organization with a vision to become the leading company in building high quality life-science and health-production (LSHP) capability in Africa. Our mission is to organize investments in high quality human resources, materials and technologies for developing world-class LSHP in Africa. Our purpose is to invest in places for building clinics and hospitals, and for manufacture of medicines, medical devices, and medical/health supplies in Africa. In order to achieve our mission, vision and purpose, we have created Ubricoin.
Ubricoin is a blockchain built on Ethereum protocol. It is a peer-to-peer utility token that will give incentives to anyone in the world to facilitate global health. It will be used to create platforms to support life-science research and development, generic drugs manufacturing and health services delivery.
There are various ways to define tokens under the cryptocurrency space. However, for the purposes of this paper, I will use two definitions. A token can refer to digital assets that are built under another cryptocurrency’s platform for example, ethereum. A token can also be used to mean tokens that are have specified functions under specific systems such as access to a particular ecosystem.
These are also called user tokens or app coins. They represent future access to a company’s products or ecosystem. They are not designed as investment instruments meaning people should not expect any profits from buying the token.
There are two types of utility tokens:
a. Digital coupons
b. Tokens that provide users with access to its decentralized forum (i.e., Soko Janja)
Security tokens are cryptocurrency tokens that derive their value from a third party tradable asset thereby making it subject to federal security regulations.
The Howey test was created from the SEC v W. J. Howey Co. in
order to determine when a person invests his money in a common enterprise and
is led to expect profit solely for the purposes of the securities act. It is
currently the standard method that is used to thoroughly determine whether a
transaction qualifies as an example of an investment contract. The transactions
that qualify as investment contracts are considered as securities. This
therefore means that they are subject to specific requirements related to
disclosure and registration.
Howey test determines whether the value of a transaction represents an investment contract if;
a. A person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a 3rd party.
b. It asks whether the value of a transaction for one of its participants is dependent upon the other’s work.
From the perspective of the Howey test, the operative question in this case is whether or not cryptocurrency investors are participating in a speculative enterprise, and if so, if the profits those investors are entirely dependent upon the work of a 3rd party.
If the SEC determines that a particular crypto token is classified as a security that brings a host of implications to it.
Our company, Ubrica, issues tokens for development of its projects and this allows the token holders to buy different Ubrica products or services in future.
Ubrica tokens are classified as utility tokens and participants in the Ubrican community can buy them for use to access Ubrica services, products and produce. The main purpose is to get access to the Ubrica ecosystem, but not to gain profits or dividends. Participants enlist on Soko Janja at no cost and get medical services at a URCC near them. The same mechanism functions with Ubricoin. The main value of the token is access to Ubrica’s proof of stake protocol tokenization platform.
If a person is a holder of Ubricoin that does not mean that they own Ubrica or are entitled to shares in Ubrica.