What makes a crypto token a security? It’s the central question plaguing the industry, and while the U.S. Securities and Exchange Commission isn’t volunteering an answer, the agency has showed some of its hand in enforcement documents crypto lawyers are studying like scripture.
A complaint against a company selling an alleged unregistered security this week – Dragonchain and its DRGN token – follows on the heels of a more expansive document last month in which the agency spent dozens of pages explaining how AMP and eight other cryptocurrencies should be registered securities. This stream of enforcement language offers a rudimentary guide for other companies wary of the same finding, according to interviews with several industry advisers.
The stakes are high, because any token that’s a security would need to be registered with the SEC and be traded on regulated exchanges – an infrastructure that doesn’t really exist, yet.
‘Enforcement 40’ for 2020
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