On July 25, the U.S. Securities and Exchange Commission (SEC) issued its most comprehensive public guidance to date on digital assets such as cryptocurrencies and tokens. Key points from the guidance are:
- Initial Coin Offerings (ICOs) are required to be registered with the SEC if the digital assets are securities offered or sold in the U.S.
- Digital assets can be evaluated for securities status using traditional securities law criteria
- Automated functions through smart contracts or other code remain subject to securities laws
- Companies dealing in digital assets should consider seeking counsel as to whether the digital assets are securities
- Companies dealing in digital currencies may need to register as broker-dealers, securities exchanges, or alternative trading systems
- Companies investing in digital assets and advising on investment may need to register as investment companies or investment advisers