As Hogan noted, in the United States of America, a legal test developed back in the 1930s is used to determine whether an asset is a security, and is therefore subject to regulation by the government. <\/p>\n
Although the SEC\u2019s website says \u201cUnder the Howey Test, an investment contract exists if there is an \u201cinvestment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others.”<\/em><\/p>\n However, the SEC now includes the marketing style of a cryptocurrency as proof that there was a common enterprise for profit between the buyer and the seller. This conclusively means that the cryptocurrency in question can be branded as a security.<\/p>\n With the Cardano (ADA) token being initially released as an ICO; a sale to make money in order to build the ledger. That in itself is dangerous for Cardano (ADA), as the SEC considers all ICOs as sales of securities.<\/p>\n But as Hogan recounts, Cardano bypassed the perceived dangers by launching the ICO in Japan, which was at the time, very legal friendly for cryptocurrencies. 95% of the ICO went to Japanese investors, then to exchanges, which then sold the asset to Americans. Although there are chances that the Cardano foundation can be sued, these chances are very slim, which brings the legal danger rating of Cardano to 2.5\/10.<\/p>\n As Hogan found, in the space of one week, following the creation of the meme-coin, 6.58 billion Dogecoin was mined, and 95% of all existing Dogecoin in the space of one year. With the absence of the sale of an ICO. \u201cThe SEC would only be made more of a joke if it sued a joke coin [DogeCoin]. So I see no problem here.\u201d<\/em> concluded Hogan.<\/p>\n Although many have suggested that Elon Musk might be prosecuted in the future for market manipulation, the attorney states that\u2019s never going to happen. And even if it did, he maintains that the price of Dogecoin will not be affected directly. As far as the legal briefs rating is concerned, Dogecoin gets 2\/10.<\/p>\n Polkadot (DOT), Which is designed to connect different blockchain networks in a single network has shown itself to be a very attractive technology, but unfortunately, the Web 3 foundation upon which the network was built, has a history of ICO involvement in 2017 and has raised nearly $200 million since then.<\/p>\n Hogan notes that because the ICOs took place before the Polkadot platform came to life fully, sales of the DOT coin presents themselves as an investment contract, where buyers seem to be relying on the developer’s efforts for the increment of the token\u2019s value.<\/p>\n While the ICO sales were not made available to Americans and the Chinese, the SEC could still attack exchanges if it can conclude that DOT was sold \u201cin the character of a security.\u201d<\/em> The danger ratings for Polkadot (DOT) per the above analysis provided by Hogan is 5\/10.<\/p>\n Uniswap\u2019s move to interstate decentralization by distributing tokens through an airdrop may have saved it from getting into a lot of trouble with the SEC, as there has been a long-standing argument that the airdrop, under the current securities laws, was basically just securities transfer. <\/p>\nCardano is in the safest zone<\/strong><\/h2>\n
The SEC may never go to war with Dogecoin<\/strong><\/h2>\n
![](\"https:\/\/s3.tradingview.com\/snapshots\/m\/mXynPGNd.png\")
<\/p>\nPolkadot is safe for now, but there\u2019s still a problem<\/strong><\/h2>\n
Uniswap might need to watch out a little bit<\/strong><\/h2>\n