"Our framework clarifies the contours of an investment contract and distinguishes between five categories of digital assets, four of which are not securities. We have also begun to chart a path of compliance for entrepreneurs who seek to understand when the fundraise for a crypto asset implicates the federal securities laws."
"Classification depends on the economic reality of a transaction rather than labels, with investment contracts defined by capital allocation into a common enterprise with an expectation of profit from others' efforts."
"The release also highlights the diversity of crypto assets in structure and function, requiring individualized analysis rather than a universal standard, while reflecting coordination between the SEC and Commodity Futures Trading Commission on oversight boundaries."
"Uncertainty around fundraising practices also drew attention as the framework outlines conditions under which token-related capital formation may trigger federal securities requirements."
The SEC is refining its approach to digital assets, focusing on when tokens qualify as securities through a revised interpretation of the Howey test. This framework categorizes tokens into five groups, with four not classified as securities. The SEC emphasizes that classification is based on the economic reality of transactions, requiring individual analysis. The framework also outlines conditions for fundraising practices that may trigger federal securities requirements, aiming to assist developers and issuers in understanding legal compliance during early-stage funding.
Read at news.bitcoin.com
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