The Pitfalls Of SEC's Crypto Regulation By Enforcement

Law360 (January 10, 2020, 5:38 PM EST) -- Neither regulators nor legislators have offered clear legal guidance as to whether a given digital token will be treated as a security. The U.S. Securities and Exchange Commission has made it nearly impossible to predict whether the regulator will deem a specific token to be a security under its Howey test[1] such that the SEC will institute action against token developers, sellers or exchanges for engaging in unlawful offerings under the federal securities laws.

And although certain lawmakers have introduced bills to attempt to clarify whether tokens fall within the ambit of the federal securities laws, none have been written into...

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