Important Notice
As per our legal, distributing profit to token holders will attract Securities Act of 1933.
Thereby leaving us with below options:
1. Ban US customers from trading on our exchange
2. Do not distribute profit to token holders
We have come to a decision to not distribute profit because disallowing US customers will be a major setback for our exchange.
However, eBCH in all its genuineness, is currently working on the project which is certainly going to help see a better/deserving price of its token.
In lieu of this, we have decided to reward our token holders by increasing trading discount when paying transaction fee in eBCH
to 70% instead of 50%. No other exchange will provide such a heavy discount on trading fee, but we being a community token
and keeping token holders in mind have to be fair with them at all times.
Here is the extract from the Securities Act of 1933 for your reference. You can find this piece of information online too.
Section 2(1) of the Securities Act of 1933 defines the term "security" to include the commonly known documents traded for speculation or investment. This
definition also includes "securities" of a more variable character, designated by such descriptive terms as "certificate of interest or participation in any
profit-sharing agreement," "investment contract," and, "in general, any interest or instrument commonly known as a security.'" The legal issue in this
case turns upon a determination of whether, under the circumstances, the land sales contract, the warranty deed and the service contract together
constitute an "investment contract" within the meaning of § 2(1). An affirmative answer brings into operation the registration requirements of § 5(a), unless
the security is granted an exemption under § 3(b). The lower courts, in reaching a negative answer to this problem, treated the contracts and deeds.
Below is Supreme Court judgement regarding “Howey test” and repercussions of profit distribution.
SEC v. Howey Co., 328 U.S. 293 (1946)
Upon the facts of this case, an offering of units of a citrus grove development, coupled with a contract for cultivating, marketing, and remitting the net
proceeds to the investor, was an offering of an "investment contract" within the meaning of that term as used in the provision of § 2(1) of the Securities Act
of 1933 defining "security" as including any "investment contract," and was therefore subject to the registration requirements of the Act.
For purposes of the Securities Act, an investment contract (undefined by the Act) means a contract, transaction, or scheme whereby a person invests
his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party, it being immaterial whether
the shares in the enterprise are evidenced by formal certificates or by nominal interests in the physical assets employed in the enterprise.
The fact that some purchasers, by declining to enter into the service contract, chose not to accept the offer of the investment contract in its entirety does
not require a different result, since the Securities Act prohibits the offer, as well as the sale, of unregistered nonexempt securities.
The test of whether there is an "investment contract" under the Securities Act is whether the scheme involves an investment of money in a common
enterprise with profits to come solely from the efforts of others; and, if that test be satisfied, it is immaterial whether the enterprise is speculative or non-
speculative, or whether there is a sale of property with or without intrinsic value.
The policy of the Securities Act of affording broad protection to investors is not to be thwarted by unrealistic and irrelevant formulae.
We hope that eBCH token holders will understand above mentioned legalities and support us like they have been until now.
Thanks,
The eBCH Team