The US Securities and Exchange Commission's Division of Corporation Finance (CorpFin) issued a detailed statement on April 10, 2025, outlining the disclosure requirements for companies dealing with crypto asset securities. The guidance aims to clarify the classification of crypto tokens under US securities laws, updating the application of the Howey test and distinguishing between security and non-security tokens. The SEC emphasizes the importance of the 'reasonable expectation of profit' criterion in determining whether a token qualifies as a security. Tokens linked to governance rights or revenue sharing may still be considered securities based on their functionality. The guidance highlights scenarios where tokens are likely to be classified as securities, focusing on central control, profit expectations, and limited utility at the time of sale. While the rules provide clarity, there are concerns about potential hindrances to crypto innovation and legal uncertainties in the industry. Read more AI-generated news on: https://app.chaingpt.org/news

#SEC