For the first time, the SEC has attempted to clearly define the different types of cryptoassets and outline the regulator’s approach to them by issuing these new standards in conjunction with its sister agency responsible for commodities.
SEC Chairman Paul Actins told reporters after a speech in Washington on Tuesday that the agency will propose a formal regulation within a week or two that will further spell out the innovation benefit provision and other aspects of cryptocurrency regulation, according to coindesk.com.
“After more than a decade of uncertainty, this interpretation will provide market participants with a clear understanding of how the Commission views cryptoassets under the federal securities laws,” Atkins said.
Atkins noted that the new interpretation of the “token taxonomy” takes a position the agency has long been hesitant to take: “Most cryptoassets are not securities.”
“Only one class of cryptoassets remains under the jurisdiction of the securities laws, namely digital securities, which are traditional securities based on new technologies,” he said. – This distinction returns the SEC to its core mission and statutory authority to protect investors involved in securities transactions.”
In the new guidance, the commission states that a digital asset becomes a security when its issuer offers it as an investment in a common enterprise linked to promises of profits based on management efforts. However, such an investment contract is terminated when “either the issuer has fulfilled its representations or promises or has failed to meet them,” at which point the asset ceases to be regulated as a security.
“We are no longer the Securities and Exchange Commission,” he said Tuesday at the Digital Chamber’s DC Blockchain Summit, just minutes after the new standard was released. The phrase drew a round of applause among the crypto community.
This jubilation is due to the fact that the circulation of securities in the U.S. is very tightly controlled and entangled with a huge number of different laws, regulations and mandatory guidelines.
