Commissioner of the Commission on securities and stock exchanges of the USA Hester pierce has published a transcript of his recent speech on the issue of regulation of tokens and their classification as securities. In particular, she noted that utilitarian tokens, i.e. tokens that perform only service functions within a running network should not be classified as securities.
“If tokens are not sold as investment contracts, they generally are not securities. Tokens are sold for use in a functioning network, and not as investment contracts, not falling within the definition of securities,” said pierce.
Thus, the representative of the SEC again made the distinction between the so-called utility tokens and security tokens.
She also reminded Howie about the Test that applies to determine whether the token under the definition of securities. According to this test, the transaction is classified as a security if the investor answers ” Yes ” to all four questions:
- There are a fact of investing.
- There is an expectation of profit.
- The money is invested in a common enterprise.
- Any profit and its size does not depend on the investors ‘ efforts and from the efforts of the counterparty or a third party (the promoter).
Statement Hester pierce, perhaps, is not a revelation, but once again reminds us about how exactly the SEC is trying to understand the often complex and unpredictable world of cryptocurrency. It is no secret that for many projects the classification of their tokens as securities compare a death sentence because of the cost and time required to achieve legal compliance.
For this reason, many projects are doing everything possible to avoid this, for example, are registered outside of the US or limit American involvement in ICO.
However, the influence of the SEC on a global scale is sufficiently large. Discussions about the far-reaching possibilities of the Commission from the point of view of the ability to prosecute foreign companies have been going on for one year. And if some insist on the fact that the US is just another jurisdiction in the common variegated picture, others look at this question differently, seeing a powerful economic Empire with adequate means to prosecute companies around the world.
We will remind, earlier this month it became known that the SEC intends to study the data of the leading cryptocurrency blockchains. Communication from the Commission States that these data it needed “to support efforts to monitor risks, improve legal compliance and information gathering for policy-making in the field of digital assets.”