On Tuesday, March 17, the U.S. Securities and Exchange Commission (SEC) released a long-anticipated interpretation clarifying which cryptocurrencies qualify as securities and which types of digital assets fall outside federal securities laws.

The SEC defines a security as any investment in which people expect profits based on the efforts of a central team or organization. This is determined by the “Howey Test.”

The Howey Test is the American legal standard used to determine whether an asset or transaction qualifies as an “investment contract,” and therefore a security. 

While a fixed list of cryptocurrencies that qualify as securities is not published, the SEC has indicated that many tokens issued…