What Are the Regulatory Implications of Valuing a Token as a Security? ▴ Learn

What Are the Regulatory Implications of Valuing a Token as a Security?

If a token is valued as a security, it must comply with strict securities laws, including registration, disclosure requirements, and restrictions on who can trade it (e.g. only accredited investors). Non-compliance can lead to severe penalties and legal action, fundamentally impairing the project's viability and value.

This compliance overhead adds significant operational cost and limits the potential market size, which must be factored into the DCF and risk premium.

What Are the Implications of a Token Being Classified as a Security under the Howey Test?

Why Is the Classification of a Crypto Asset as a “Security” Important for OTC Regulation?

How Do Utility Tokens Differ from Security Tokens in the Context of Regulatory Compliance?

What Are the Implications of a “Security” Vs. “Commodity” Classification for a Crypto Derivative Product?