Historical Howey analysis, on the record.
The following analysis, dated 16 May 2019, addresses the classification of the VLM token under the US federal securities law framework established in SEC v. W. J. Howey Co. It is preserved here as a matter of historical record and does not constitute current legal advice.
Memorandum, 16 May 2019
Application of the Howey test to VLM.
Prong 1, investment of money. Persons acquiring VLM tokens do so in exchange for consideration. This prong is satisfied.
Prong 2, common enterprise. The token operates as the metering instrument for a shared protocol used by multiple independent participants. The commonality is functional rather than a pooling of investor capital into an operating entity for the purpose of returning profits.
Prong 3, expectation of profits. VLM is not marketed for price appreciation. No representations of investment return, dividend, or profit share are made. Utility characteristics are documented; investment characteristics are affirmatively disavowed.
Prong 4, from the efforts of others. The value proposition rests on the utility of the protocol to the participant, not on managerial efforts producing a return. Protocol operation is not equivalent to enterprise management for the benefit of passive investors.
Conclusion. On the facts as documented in 2019, VLM as described did not meet the four-prong Howey test for classification as a security under United States federal law. The analysis is dependent on the utility characteristics being maintained and on the token not being offered or marketed as an investment instrument. That posture has been preserved.
This document is historical. It is not current legal advice, is not a securities-law opinion for any specific transaction or investor, and should not be relied upon by any party as such.