The ABSURDITY of the SECs view on airdrops (and subreddit community tokens?)

As I, like many other r/cc long-time lurkers, received my first r/cc token distribution this past week, I began to look into the tax implications.

I came upon this article and many others like it: medium.com/broctagongroup/demystifying-sec-order-on-airdrops-52b3fed8bc47

“The key reason why airdrops are considered to be a sale of securities is that the tokens themselves are considered securities. What constitutes a security differs from jurisdiction to jurisdiction. So long as the token itself is not considered a security in a particular jurisdiction, the airdrop should be legal. Hence, issuers may be able to continue to use airdrops to spread awareness about their projects in most non-US jurisdictions as long as the tokens themselves are not considered a security in a particular jurisdiction.”

If tokens are used as a means for the r/cc subreddit to generate revenue through banner ads, the Howey Test then comes into play. This is an incredibly gray area, but for the sake of this post I will assume that in the eyes of the SEC that community tokens are a security.

Under that premise, upon receiving a distribution, the recipient would be liable to owe tax on the received token based on the spot price. The absurdity begins there…

Our subs token has a 24hr volume of ~$43,000 based on my quick googling. r/ethtrader and r/fortnitebr community tokens even less!

For a top contributor that has earned several thousand tokens, they’d be expected to owe tax on the spot price of $0.18 despite the fact that their sell pressure would cause a significant drop in price due to the low liquidity.

I truly feel that this needs to gain attention!