Can a Token Be Considered Decentralized If a Large Portion Is Held by the Founders? ⎊ Path

Can a Token Be Considered Decentralized If a Large Portion Is Held by the Founders?

No, a large concentration of tokens in the hands of the founders or the issuing entity strongly suggests that the network is not sufficiently decentralized. This concentration implies that the founders retain significant control over the network's direction and success, satisfying the "efforts of others" prong of the Howey Test.

Regulators view the distribution of tokens as a practical measure of whether investors still rely on the central party's managerial efforts for their profit.

What Is the Significance of the “Solely” from the Efforts of Others Clause in the Howey Test?

Define the “Solely from the Efforts of Others” Prong of the Howey Test

How Do Decentralized Autonomous Organizations (DAOs) Complicate the Howey Test Analysis?

How Does the Concept of ‘Sufficient Decentralization’ Relate to Token Classification?

What Is the Howey Test and How Is It Applied to Determine If a Token Is a Security?

How Does the Concept of Decentralization Affect the Application of the Howey Test?

How Does the Howey Test Apply to Decentralized Autonomous Organizations (DAOs)?

What Is the Howey Test and How Does It Determine If a Token Is a Security?

Glossar

Managerial Efforts

Execution ⎊ Managerial efforts within cryptocurrency, options, and derivatives markets center on precise trade execution strategies, demanding a nuanced understanding of order book dynamics and latency arbitrage opportunities.

Founders

Genesis ⎊ The term "Founders" within cryptocurrency, options trading, and financial derivatives contexts typically denotes the initial architects or core contributors to a protocol, project, or firm.