Recently, the U.S. Securities and Exchange Commission (SEC) officially issued new guidelines to better clarify the criteria for classifying whether a crypto token is a security. This is an important step in the context of a rapidly evolving but complex and legally contentious cryptocurrency market.
Key criterion: 'Profits based on centralized efforts'
The SEC emphasizes that a token will be considered a security if the buyer expects profits primarily based on the efforts of a central group or a specific promoter. This criterion is not new but is based on a traditional principle known as the 'Howey Test' – a legal standard used to determine securities in the U.S. since the 1940s. Accordingly, if an investment yields expected profits from the efforts of others (usually the development team or management), it may be classified as a security and subject to securities law regulations.
The SEC's public emphasis on this criterion shows that they want to tighten control over new token projects, avoiding situations where projects resemble pyramid schemes, inflating profits based on the reputation of the development team or aggressive marketing campaigns, without actually creating sustainable value or applications.
The case of Ether (ETH) – a notable turning point
The most notable point in the SEC's statement is that they do not view Ether (ETH) as a security, citing 'currently no capability to generate profits' based on centralized efforts. This can be understood as an official acknowledgment that ETH has evolved into a truly decentralized network, where user profits are no longer dependent on any development team or promoter.
However, this statement is also deeply ironic: despite not generating clear profits, Ether is still protected from stringent regulations like other tokens. This raises questions about consistency and fairness in the application of laws among different types of tokens.
Legal and market impacts
This SEC guidance will put significant pressure on new crypto projects, especially those that rely heavily on the development team to drive price increases or promote. If classified as securities, these projects will have to comply with registration regulations, financial reporting, and be subject to strict SEC oversight – something many projects cannot or do not want to do due to the decentralized and agile nature of the crypto market.
Therefore, future projects must design their business models and tokenomics so that user profits do not concentrate on the efforts of a small group but are based on the natural development of a decentralized network or provide genuine and sustainable value.
Long-term vision: control or protection?
The SEC's new guidelines are a clear sign of seriousness in regulating the crypto market to protect investors from risky investment schemes and disguised pyramid schemes. However, it also poses the risk of stifling innovation in the cryptocurrency space, as traditional securities laws are not easily adaptable to new technologies and models.
In this context, developers and investors must have a long-term vision, proactively building a truly transparent, decentralized crypto ecosystem that complies with legal regulations, so the market can develop sustainably, unimpeded by legal barriers or policy volatility.
