The US Securities and Exchange Commission (SEC) has issued a warning about scams involving 'crypto asset securities', leading to a debate around the term's legal status. Ripple's Chief Legal Officer, Stuart Alderoty, has argued that the term lacks a legal definition when used by the SEC, and called it a "fabricated term with no legal basis." The SEC has referred to 'crypto asset securities' in enforcement actions and investor blogs, but the legal qualification of what constitutes a 'crypto asset security' remains unresolved. The SEC has relied on the Howey test to determine which investment contracts are subject to securities laws, but its application has been questioned in the Ripple lawsuit. The SEC's stance on cryptocurrencies such as Bitcoin, Bitcoin Cash, and Ethereum as securities or not also leaves room for interpretation.



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