Unchained Friend.tech: The Legal and Tax Ins and Outs of This Year’s Hottest Crypto App - Ep. 540
Sep 5, 2023
J.W. Verret, an Associate Professor of Law specializing in securities and banking law, teams up with Jason Schwartz, a tax partner and co-head of the Digital Assets and Blockchain Practice at Fried Frank. They dive into Friend.tech, discussing whether the platform's 'keys' could be classified as securities. The conversation delves into tax implications for users, from gains to airdrops, and challenges surrounding privacy on the app. They also explore how Friend.tech differs from previous attempts at decentralized social media and ponder its future impact.
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Security Status of Keys
- Friend.tech keys could be deemed securities by the SEC if creators encourage purchases as investments.
- Changing "shares" to "keys" was a smart move, reducing that risk.
Wrapped Friend.tech Tokens
- Wrapped Friend.tech tokens, ERC-20 versions of keys, lean more towards commodities than securities.
- However, the presence of a market maker introduces complexities and potential securities law issues.
Friend.tech Tax Implications
- Understand that Friend.tech's tax implications differ from typical crypto transactions.
- Consult a tax professional specializing in crypto for personalized guidance.
