The SEC’s latest crypto guidance still leaves too much unsaid

The SEC and CFTC recently issued joint guidance aiming to clarify how securities laws apply to digital assets, representing a reset from the previous “regulation by enforcement” approach under Chair Gensler. While the guidance is a welcome development on issues like staking and meme coins, it falls short of providing the full course correction the crypto industry needs, particularly regarding the application of the Howey test to determine what constitutes an “investment contract.” The SEC’s silence on whether an investment contract requires contractual obligations, and its continued reliance on “facts and circumstances” and developer representations, leaves room for ambiguity and potential overreach. The article argues that the SEC should clearly reject the previous approach of piecing together investment contracts from marketing materials and instead focus on concrete agreements at the point of sale. Further clarification is also needed regarding secondary market trading and the application of the Howey test to tokens traded on exchanges, potentially adopting the approach outlined in the Ripple case. The authors emphasize that addressing these ambiguities is crucial to prevent future regulatory uncertainty and ensure the long-term viability of the crypto industry in the United States.

(Source：CoinDesk)