Friend Tech announced that it would be replacing the shares on the platform with “keys”. “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,” the social platform said in its latest announcement.
The decentralized social platform Friend Tech has created much buzz in the crypto space amid the airdrop news. In its early days of launch, the platform also managed to beat giants like Bitcoin and Uniswap with daily transaction fees crossing over $1 million.
Previously, Friend Tech said that it would allow users to buy “shares” of personal accounts on X, formerly Twitter. When conducting transactions through Friend.tech, there are two separate 5% fees. One of these fees goes into the treasury of Friend.tech, while the other is directed to the account holder who is involved in the shares being traded. Additionally, users have the potential to make a profit by investing in accounts where the value of shares goes up.
Several analysts stated that the model is quite similar to the stock market, believe many security experts. Similar to how shareholders of public companies can receive dividends, influencers also have the choice to share fees with buyers. This is a benefit that many influencers are already providing to increase trading activity and the value of shares.
Friend Tech – Navigating Through SEC Scrutiny
Analysts have been arguing that Friend Tech’s “shares” provide an expectation of profits to its holders. This could be one of the reasons that Friend Tech changed “shares” to “keys” in order to avoid any SEC scrutiny. Mark Hiraide, a partner at Mitchell Silberberg & Knupp told Blockworks:
“Clearly there’s some utility there, but the fact that they call these ‘shares’ is an indication that these are not just admission tickets. What they are selling essentially is the prospect of capital appreciation in the shares; as more people join the platform, as more people buy shares to access popular personalities, the value of the shares will increase.”
Observing whether the shares eventually trade on a platform other than Friend.tech will also be important, according to Hiraide. Listing on external exchanges could potentially complicate the differentiation between these assets and conventional securities.
Hiraide noted that the visible popularity of Friend.tech and the attention it’s receiving might be sufficient to prompt intervention from the SEC.