Friend.tech, the fast-growing Web3 social network, has opted to change the name of its “Shares”, which will now be called “Keys”. While friend.tech suggests a simple name change to better reflect the role of these shares, many observers see it as a precaution to avoid an attack from the Securities and Exchange Commission (SEC).
Friend.tech is rebranding its shares
Friend.tech, the Web3 social network that has been in the news for some time, has announced a change in the name of its “Shares”, which represent a fraction of the profile of a personality on the application, and which will now be called “Keys”.
We’ve renamed Shares to . The original name was a placeholder during development and we think Keys better illustrates their purpose as in-app items used to unlock your friends’ chatrooms pic.twitter.com/phkZky13VL
– friend.tech (@friendtech) August 21, 2023
According to the short tweet from friend.tech, the name “Shares” was only temporary, and the new name would be more appropriate to “better illustrate their purpose as in-app elements used to unlock your friends’ chat rooms”.
To illustrate their usefulness, ‘Keys’ can be used to unlock access to private discussion groups between shareholders and the issuer of the shares. Then, the more shareholders there are, the more the price of a share rises in parallel, according to the law of supply and demand.
Friend.tech has been so popular in recent days that Base, the layer 2 on which the application is based, exceeded the number of Ethereum (ETH) transactions per second on Monday 21 August.
A success due to the significant potential gains if the share price were to rise, but also following the announcement of a potential airdrop by the friend.tech team. At the same time, a number of influencers have decided to join friend.tech as well as advertising it, earning revenue when their shares are traded.
A fear of the SEC?
According to some observers, this change of name is probably less trivial than it seems. Indeed, changes in the value of shares on friend.tech could be equated with the payment of dividends to shareholders by the Securities and Exchange Commission (SEC). The Keys model could also be considered as an investment contract, which could raise the status of the Keys to that of a security, as required by the famous Howey test.
At least that’s what Jesse Hynes, lawyer and founder of Seedstarter, thinks:
Let’s talk about https://t.co/1IqzcdJf8w – as it seems to be sweeping crypto twitter.
First, this smells an awful lot like an unregistered security offering – I mean it even calls it “buy shares”. Nothing is more security-like than shares in a venture
– Jesse Hynes (@jesse_hynes) August 19, 2023
” Let’s talk about friend.tech – because it seems to be driving crypto Twitter. First of all, it looks an awful lot like an unregistered security offering – I mean they even call it “buying shares. “Nothing looks more like a security than shares in a company. “
And by well-known Twitter trader @0xSisyphus, who posted not without irony on X:
“We’ve renamed Shares to Keys. The original name was fine, but our legal team informed us that it might not be a good idea to use words associated with the financial markets. “
In parallel, in a message sent to our Decrypt colleagues, Racer, the co-founder of friend.tech, said that they did not expect the application to be such a success:
“We initially shared the app to start load testing and we didn’t expect it to go viral. [We want to catch our breath. “
A scenario that could be even more significant if friend.tech Keys could one day be traded on the secondary market. A real precautionary measure, then ?