To be clear, I think Celsius committed actual fraud. I just want to talk about one particular point here.

> So the burden of proof seems to be on the claim that they're the same, or that it's a meaningful analogy.

I have a pair of “Dear Summer” Off-White x Nike Dunk Lows, the last collection released while Virgil Abloh was alive. The SNKRs (Nike) app randomly selected active users for the chance to purchase them; necessary, because they were guaranteed to sell out instantly. At the time of purchase nobody had any clue what the shoes would look like, nor which "n of 50" colorway they would get. We were presented with a picture of the shoebox, a size selection, a buy button, and a countdown timer. However, it's not far off to say that despite this, every single person (remember, only active users got this notification) that initially purchased the shoe did so knowing there was absolutely no chance that a limited edition Off-White/Virgil Abloh/Nike shoe would sell for less than a 100%+ premium over retail on the aftermarket. Completely risk-free, assuming $180 wouldn't hurt your pockets in the near term.

Under the SEC's reading of the Howey Test that omits the word "solely," the purchase of these shoes constitute

1. An investment of money (check)

2. In a common enterprise (check. Let's be honest, the majority of pairs sold hit the resell market immediately. Forman, 421 U.S. at 852-53 may not be applicable.)

3. With the expectation of profit (check, check, check) to be derived from the efforts of others (the ongoing reputation and marketing efforts of everyone involved),

making them unregistered securities.

Naturally, this means Nike has to "come in and register," for every limited supply drop, StockX and GOAT have to register as securities exchanges, and only accredited investors are allowed to purchase at retail. Anything else is clearly a violation of The Law.

All of this is perfectly reasonable because, "the law is clear, we’re obligated…to enforce the law as Congress passed it and how the courts interpret it," as Chair Gensler put it.

I'm probably not exactly reading the terms precisely how Congress intended or how any particular SEC agent or court might but the advertising and messaging all seems very different from anything in crypto outside of NFTs. There's no pitch of using these sneakers to make transactions, or a "sneaker savings account". The "be one of the only people to get this thing" core principle seems distinct. Yes, there's a resale market for that thing - first sale doctrine basically means they COULDN'T try to remove that, ya? - but how much is that their "fault" per se? To me this fails (2) or (3) for shoes (or Pokemon cards or what have you).

E.g. if we interpreted the test like that, wouldn't we end up with nearly any "limited run" product being a security? And that's never how the law has been interpreted or enforced, and certainly can't have been the intention.

So I'm unconvinced by the lay reading of the law of folks saying "this makes sneakers a security too" since it seems no more valid than a lay reading that doesn't and there's been no official indication that sneakers or trading cards are getting anything like the attention crypto did from regulators, despite being much older markets.

Except there actually are people who really do want the shoes not for resale. And that is a legitimate driver of value and it is a very limited market.

The SEC has argued in some crypto cases that even if just a few token holders buy for profit instead of for utility, the token is still a security. Of course that’s wrong, but it is the SEC official position.

Just as there actually are people who really do want the tokens just to cover gas fees and not for resale.

What's the common enterprise? Buying sneakers gives you a pair of sneakers, not the right to a piece of Nike's profits.

In this case the sneakers sound like a commodity, not a security.

I agree. My point is that calling them a security is consistent with the SEC’s position on what makes a digital asset a security.

2) and 3) don't seem to actually apply to sneakers here:

2) I've used the app before, the fact that someone else and I both want these sneakers doesn't make our purchase of a pair each a "common enterprise".

3) I didn't expect profit, and buying a thing which can be resold for profit doesn't mean every purchase of it was an expectation. All my sneakers are worn.

Where this fails is

>to be derived from the efforts of others

The buyer expects to derive profits from arbitrage to the existing market value. If Nike shut down the moment you bought the shoes the profits would still be realized, because they don't require any effort on Nike's part.