The challenge facing token holders and cryptocurrency businesses.
I'd like to preface this article by saying that I have held many coins and tokens over the many years I have been in crypto. I have found myself on both sides of the coin, having told people "let the team work in peace! They know what they're doing!" and also trying to make unwanted recommendations of my own to businesses whose coins/tokens I own.
"I bought coins/tokens, what does that make me?"
Investopedia defines an investor as "any person or other entity (such as a firm or mutual fund) who commits capital with the expectation of receiving financial returns." (1)
A shareholder is defined as "a person, company, or institution that owns at least one share of a company’s stock, which is known as equity. Because shareholders are essentially owners in a company, they reap the benefits of a business’ success." (2)
Now that we have these two definitions out of the way; if you're someone who purchased a coin or token through an exchange or other means such as an ICO, what does that make you?
In short, it depends. Purchasing a utility token or coin whose primary use is access to a company's products makes you neither. Although you own the asset a company created, they have no obligations to you as a consumer beyond providing the utility for the asset they created. For some coins, their primary purpose is quick, near-zero fee payments which means owning their coins is equivalent to owning dollars. You don't have any say in the US Government just because you have some of their currency.
For other coins, their asset provides a means to access their services (such as background checks, patent searches, trading bots, magazine subscriptions, etc) that are paid for through blockchain transactions. Owning these assets makes you a customer, a user, but not necessarily an investor or shareholder.
Purchasing a coin whose primary purpose is to increase in value as a company makes strides and succeeds might make you an investor. Committing money to the success or future success of that company with no other reason for owning those assets means you are committing capital as a means to further the success of that company.
As for shareholders, there are very few projects that utilize this form of investment. Some projects refer to shareholders as "angel investors" which is just a word for someone who provides financial backing in a company in exchange for equity (3). This does not apply to the average person. If you are a member of the general public who purchases from an ICO or an exchange, you are most likely NOT a shareholder.
What does it all mean?
In short, it means that you probably have less say in a company than you think you do. Many people like to make unsolicited recommendations or demands of cryptocurrency projects because they identify themselves as an investor or shareholder. Not being either only entitles you to the rights a customer has, which usually does not include an audience with a CEO, a company listening to your ideas, demands to see behind the scenes or how the company operates or spends their funds or many other things people feel entitled to.
Why did you write this?
I feel as though the bear market has changed many people. They are frantic, greedy, and want to make their money back through any means necessary. Cryptocurrency companies are often immature and held to different standards than traditional companies, which can sometimes lead to group bullying and customers/users thinking they can make demands and micromanage companies because they bought some digital currency created by that company.
This issue is magnified when looking at small companies that are still actively trying to obtain new users. Cryptocurrency enthusiasts often take advantage of a company's vulnerable position and leverage their demands threatening to make the small company lose customers. This can also be seen in small market cap coins when people get frustrated and try to dump the price in retribution of their demands not being met.
I'd like to end with a disclaimer that I am not a professional attorney, accountant, or other form of fiduciary and these views I have stated are my own opinions and not necessarily reflective of legal scholarship.