In Plain English: SEC Publishes Guidance on Tokens as Securities

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The U.S. Securities and Exchange Commission (SEC) has published an investment contract framework for digital assets, which is intended to give crypto companies guidance as to whether a cryptocurrency is a security. It’s the first major culminating work of the SEC’s FinHub initiative, a strategic group the commission launched in October 2018 to liaise with fintech and cryptocurrency companies and work toward more substantial regulatory guidance.This concrete framework comes after years of guidance by enforcement, wherein the SEC prosecuted ICO operators and token companies after their token sales to make examples of the more egregious and unscrupulous opportunists who took advantage of the 2016-2017 bull run.With the new 13-page framework, cryptocurrency companies will now have a clear touchstone for testing whether or not the SEC would qualify an asset that they offer as a security. But, like SEC enforcement that has targeted ICO orchestrators and broker/dealers in the past, the…

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