New token taxonomy establishes that most crypto assets are not securities, while clarifying when investment contract status can begin and end.

Key Takeaways

• The U.S. Securities and Exchange Commission (the “SEC”) issued interpretive guidance regarding the definition of “security” as applied to certain types of crypto assets and transactions involving crypto assets.
• The SEC provides five categories of digital assets: (i) digital commodities, (ii) digital collectibles, (iii) digital tools, (iv) stablecoins, and (v) digital securities, only the last of which is deemed to be inherently a security.
• The Howey test continues to be binding legal precedent and may be used to determine when the sale of a digital asset may be…