Recently, the SEC admitted that the term “crypto asset securities” has proven to be misleading. This acknowledgment is part of their shift in approach to cryptocurrency regulation. The agency clarified that this term does not refer to the tokens themselves but is shorthand for contracts and agreements related to their sale. The SEC emphasized that they originally meant not the crypto assets themselves as securities, but the accompanying contracts, such as investment agreements.
This acknowledgment occurred as part of the proceedings with Binance and sparked numerous critical responses from the crypto community. Legal experts, including representatives from Ripple and Coinbase, noted that this further highlighted the confusion and inconsistency in the SEC’s actions. Some commentators believe the agency has been misusing the term to extend its regulatory reach over as many crypto assets as possible.
This step by the SEC is significant in the ongoing regulation of cryptocurrencies, as the agency has now stated that it will review its use of the term “crypto asset securities” to avoid further misunderstandings.
