Coin Center Updates Its Securities Framework for Cryptocurrencies
Blockchain advocacy group Coin Center continues to believes some cryptocurrencies look like securities by law, and should be regulated as such. Peter Van Valkenburgh, the organization’s director of research, published a new report Friday arguing that certain cryptocurrencies follow the oft-cited Howey Test and act as investment contracts. As such, he wrote, they should be treated as securities. The report updates a 2016 version, which laid out a possible framework for regulators in determining whether any given cryptocurrency should be a security according to the Howey Test. The framework examines three variables that Van Valkenburgh believes are important for determining whether a cryptocurrency is a security: “distribution, decentralization and functionality.” Specifically, he says, how a token is initially distributed, how decentralized its underlying network is and what powers or rights token holders have should determine whether it is a security. He wrote: “We find that larger, more decentralized cryptocurrencies
Like this article? Take a second to support us on Patreon!