Overview
Securities law determines whether a token qualifies as a security and is subject to registration. It classifies assets based on investment contracts and expectations. It is a central regulatory question in crypto.
How It Works
Tests like the Howey test assess whether an asset is an investment contract. Tokens deemed securities face registration and trading restrictions. Projects structure to avoid the classification or comply.
Why It Matters
Securities classification affects how tokens can be sold and traded and who can hold them. It shapes project design and exchange listings. It is one of the most contested areas of crypto regulation.
Related Concepts
Securities Law relates to Security Tokens, Regulation, and Token launches. It determines how Tokens are treated.