RATE Group | Lawmakers look to change SEC’s 72-year-old securities definition to exclude cryptocurren…
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Lawmakers look to change SEC’s 72-year-old securities definition to exclude cryptocurren…

20 Dec Lawmakers look to change SEC’s 72-year-old securities definition to exclude cryptocurren…

Posted at 22:08h in Cryptocurrency News by

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A recurring complaint from cryptocurrency participants is the idea of applying a 72-year-old securities law to digital currencies. The Securities and Exchange Commission uses what’s known as the “Howey Test,” which comes from a 1946 U.S. Supreme Court decision involving a Floridian citrus farmer to determine whether or not a cryptocurrency is a security.

The Supreme Court determined that any transactions that qualify as “investment contracts” are considered securities. According to the SEC, an investment contract exists if “a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party.”

But experts say those standards should be more nuanced for digital assets.

Many of these cryptocurrencies are also blockchain…

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