The release is also notable because it clarifies that the common enterprise element must be satisfied under Howey, while placing greater weight on issuer representations or promises in assessing whether purchasers reasonably expect profits from the efforts of others. In that respect, the release offers additional clarity on how a non-security crypto asset may become subject to, and later separate from, an investment contract depending on the surrounding facts and circumstances.

In the release, the SEC also invites interested parties to file public comments.

The Release: A Closer Look

• The release adopts a five-category functional taxonomy: digital commodities, digital collectibles, digital tools, stablecoins and digital…