The latest crypto guidelines of the U.S. Securities and Exchange Commission (SEC) suggest a deliberate effort to transition the crypto regulations towards the path of transparency. However, at the same time, it fails to resolve the major doubts of the crypto sphere. Even if the framework signifies a move away from the former chief's enforcement-based approach to a more regulatory one, it is still not the clear path that the industry desperately needs, according to attorneys.
At the center of the issue is how the Howey Test is applied. The SEC acknowledges that most digital assets are not securities on their own, but it remains unclear when a token sale becomes an “investment contract.” The guidance leans on “facts and circumstances” rather than clearly requiring a contractual relationship, leaving room for interpretation.
Uncertainty also remains around secondary market trading. While the SEC acknowledges tokens do not remain securities indefinitely, the agency sees that tokens might still possess the elements of an investment contract based mostly on what investors anticipate. Opponents say this causes the situation to become unclear, in particular in the usual exchange where buyers and sellers are strangers to each other.
Generally speaking, the new set of instructions is a move in the right direction but not a complete departure from the old ways. If these borderline areas are not clearly spelled out, regulators or courts might continue to use them as a leverage against the crypto sector.
