Recently, there has been growing interest in whether, and in what circumstances, crypto-tokens may constitute “investment contracts” under the U.S. Supreme Court’s Howey test, rendering them securities subject to regulation in the United States. The following resources take a deep dive into that issue, exploring the structural, marketing and other key considerations that may make crypto-tokens more or less likely to be securities under Howey. As these resources demonstrate, the Howey test is highly fact-dependent, indicating that certain crypto-tokens may be securities under Howey whereas others – if properly designed – may not.
- Peter Van Valkenburgh, A Securities Law Framework for Blockchain Tokens, COINCENTER (Jan 25, 2016) Discusses certain blockchain token “rights” that likely to decrease the risk of blockchain tokens being categorized as securities under the Howey test.
- Reuben Bramanathan, Introducing the Blockchain Token Securities Law Framework, THE COINBASE BLOG (Dec. 12, 2016) Discusses the result of a joint initiative of Coinbase, Coin Center, Union Square Ventures and Consensys.