SEC Publishes Framework to Help Identify Digital Assets as Securities

This framework represents staff views and is not a rule, regulation, or statement of SEC. The staff recognizes that determining whether a new type of financial instrument, including a digital asset, is a security can require a careful analysis of the nature of the instrument and how it is offered and sold. As financial technologies, methods of capital formation, and market structures continue to evolve, market participants should be aware that they may be conducting activities that fall within the SEC jurisdiction. For example, market participants may engage in activities that require registration of transactions and persons or entities involved in those transactions. Even if no registration is required, activities involving digital assets that are securities may still be subject to SEC regulation and oversight. The information in this framework may apply to entities conducting the following activities related to digital assets:

• Offering, selling, or distributing
• Marketing or promoting
• Buying, selling, or trading
• Facilitating exchanges
• Holding or storing
• Offering financial services such as management or advice
• Other professional services

Depending on the nature of the digital asset, including what rights it purports to convey and how it is offered and sold, it may fall within the definition of a security under the U.S. federal securities laws. If after applying the framework, market participants have questions on whether a particular digital asset is a security, they are encouraged to reach out to the staff.

Related Links

• News Release
• Framework
• Overview of FinHub

Keywords: Americas, US, Banking, Securities, Regtech, Crypto Assets, Digital Assets, Finhub, SEC