SEC Spells Out Crypto Securities Rules in New Guidance

The US Securities and Exchange Commission (SEC) has released new guidance on when crypto assets and related activities fall under federal securities laws.

The update, which covers token sales, staking receipt tokens, buybacks, and network upgrades, provides clearer guidance for crypto firms on when a token may be tied to an investment contract under the Howey test.

A crypto asset may be treated as part of an investment contract if buyers invest money with the expectation of profits from the essential managerial efforts of others, based on the Howey test.