It's unusual for panels to get heated, but that's just what happened during a discussion on securities law and the Simple Agreement for Future Tokens (SAFT) on Tuesday.

Called "Structuring Legally Compliant Token Sales," the panel took place at the Cardozo School of Law, at Yeshiva University in Manhattan. There, much of the conversation centered on the SAFT white paper introduced by Cooley LLP attorney Marco Santori and Protocol Labs, as well as critiques leveled yesterday at that model by the Cardozo Blockchain Project.

Stepping back, Santori was there explain to the audience how the SAFT tries to break a token sale into two parts, separating the fundraising of a project from the code that will eventually help power the software project for which it has been designed.

In the first part, an investor gets a contract for coins once a protocol is launched and ready for use.

The people who pre-order these tokens "take on enterprise risk," Santori said. That part is definitely a security, he granted.

Continuing, Santori compared this part to how bankers used to finance miners to dig gold. When the gold came back, no one thought that the gold was a security, he reasoned. In this way, he said that, with the SAFT, the entrepreneur doesn't even have to sell what he made to pay his investors back. The investor just gives backers digital currency, the metaphorical gold.

Yet, attorneys on the panel of seven kept returning to this question of whether such a token could really be thought of like a mineral ore and the SAFT as the instrument that financed the mine.

Wright disagreed with the idea, contending that the courts will not separate the coin from the SAFT. Rather, he argues they will look at the whole process.

In a conversation with CoinDesk afterwards, he said, "That's the law."

Yvette Valdez of Latham & Watkins complicated the concerns of entrepreneurs even more, premising her comments by saying, "I don't think the pre-sale and SAFT is that simple."

A commodities lawyer, Valdez raised an important question: have entrepreneurs been too focused on the U.S. Securities and Exchange Commission when the Commodity Futures Trading Commission is likely to have jurisdiction?

In her comments, she explained that it's long been a practice for, say, an oil company to sell forward contracts to refineries that say, effectively: "We'll deliver 100 gallons of crude oil on this date for this price." This is legal, she explained, because the refinery is a commercial merchant. There's no doubt that it will receive the oil and use it.

If a hedge fund tries to buy a contract like that, though, it becomes a financial derivative.

In the same way, a venture investor who buys a stack of tokens with a SAFT in advance probably isn't, for example, going to use them to stake racks of servers in their back offices to run, say, filecoin. They intend to sell them for a profit at some point.

"The folks buying a utility token on a forward basis," she said, "I don't really see an exemption."

By the panel's end, it seemed as though token issuers faced even more legal landmines than when it started, but as Klayman put it, there's never a simple answer on these questions.

"It's still the facts and circumstances," she said, adding:

Panel photo by Brady Dale for CoinDesk