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At GoldBit we strive to provide our players and community with a safe and enjoyable gaming experience. To avoid potential issues of being classified as a security in the future, GoldBit Casino has sought legal advice. Our token is a utility token and will be used within our ecosystem to provide our players with a safe and legal way to enjoy the entertainment GoldBit casino provides.
With cryptocurrencies, legal opinions can play a critical role in determining whether a token should be classified as a security or a utility. This determination can have significant legal and regulatory implications for the token issuer, holders, and other parties involved in the token ecosystem. A legal opinion in this context would analyze the characteristics of the token, such as its purpose, use, and distribution, as well as relevant laws and regulations, to determine whether it meets the criteria of a security or utility. Based on this analysis, the legal opinion would provide guidance on how the token issuer should structure its token offering to comply with applicable laws and regulations. We have obtained a legal opinion from Law Prism Legal Consultancy which confirms we are not deemed a security as we passed the Howey Test. This test is a widely accepted legal framework used to determine whether a financial instrument qualifies as an investment contract, and subsequently, a security under U.S. federal securities laws. It consists of four criteria:
- Investment of money: The transaction involves an investment of money or assets by participants.
- Common enterprise: The invested funds are pooled together in a common enterprise, meaning the success of the project depends on the collective efforts of all involved.
- Expectation of profits: Participants invest with the expectation of generating profits from their investment.
- Profits derived from the efforts of others: The expected profits are primarily derived from the efforts of individuals or entities other than the investors.
Gold token's classification as a utility token, rather than a security, indicates that it does not meet all four criteria of the Howey Test. This distinction is crucial, as utility tokens are designed to provide access to a product or service within a specific ecosystem and are generally not subject to the same stringent regulatory requirements as securities.