SEC Clarifies Crypto Token Treatment Under U.S. Securities Laws

The SEC's Division of Corporation Finance has issued nine FAQs to clarify how cryptocurrency tokens may be affected by U.S. securities laws.

The guidance, released on September 25 and updated on September 28, focuses on three key areas: functionality, managerial efforts, and token structures.

Crypto assets that provide services such as securing or maintaining a functional system are generally exempt from the essential managerial efforts required for an investment contract analysis, according to the FAQs.

Marketing a system's current utility also typically does not create this obligation, unless accompanied by promises of future profits. Future-utility promotion may be treated similarly when it does not promote profit-making.