What Are the SEC's Criteria for "Sufficient Decentralization"? ⎊ Path

What Are the SEC’s Criteria for “Sufficient Decentralization”?

The SEC's guidance, particularly articulated by former Director Hinman, suggests that a network is sufficiently decentralized when the purchasers of the token no longer reasonably expect a central promoter or third party to carry out essential managerial or entrepreneurial efforts. Criteria include the absence of a central figure, a wide distribution of tokens, and the ability of token holders to genuinely participate in governance.

Once decentralized, the token may cease to be a security.

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