The US Securities and Exchange Commission (SEC) has made several declarations that many previously-offered crypto assets are considered securities under the law; their findings were jointly announced on the governmental SEC website. The SEC, as a regulator and enforcement agent of US security transactions, typically reveals its declarations for non-contentious options, such as when a securities token registration statement is accepted from willing and compliant parties, via EDGAR or other linked sites to the SEC.gov.

The four-part Howey test into investment contracts is the criteria used to determine the security status of an asset by the SEC. The test examines if the assets were (1) invested into (2) a collective venture (3) in hopes of profit (4) from an external party. If the offering passes the Howey Test, the asset is classified as a security. All of the assets which have been declared by SEC as unregistered securities passed Howey, and are represented in a list of crypto assets published alongside the ruling.

It is worth noting that particular instruments, such as company equity, are inherently securities and the Howey Test is not necessary. On the other side, commodities, such as orange groves, can become securities if they pass the Howey Test created by the Supreme Court.

The SEC employs over 4,500 personnel which are tasked with overseeing approximately $115 trillion worth of annual US securities transactions. Because of legal restrictions on their operations, as well as the multitude of rules and regulations which govern the commission, the SEC cautiously makes determinations and will not comment on cases which are subject to investigations or legal proceedings.

With regard to determinations of previously-declared “utility tokens”, the SEC will make those announcements when filing a public civil lawsuit. Their releases follow the conclusion of their investigation, and enable the team at the SEC to privately finalize their deliberations before bringing it to the public.



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