At the same time, the regulator sought to clarify when crypto assets that aren’t themselves considered securities may stray into the legal definition of a security by virtue of operating as “investment contracts” under the so-called “Howey test” — a Supreme Court decision from 1946, which defined when securities law applies to investments that are based on the efforts of others to generate profits.

To that end, the SEC provided guidance on the kinds of promises to investors that are needed to form an investment contract, including the source of claims that are made to investors, the way they’re communicated and the level of detail that must be provided.

The policy also sets out how an asset may stop being…