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ARTICLE · 06 NOVEMBER 2025

Crypto Securities Law: When Tokens Become Investment Contracts

Scarinci Hollenbeck LLC
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The application of traditional federal securities laws to crypto assets continues to evolve. In some cases, the Securities and Exchange Commission (SEC) considers tokens and other digital assets to be securities.

United StatesTechnology
Bryce S. Robins
Bryce S. Robins

The application of traditional federal securities laws to crypto assets continues to evolve. In some cases, the Securities and Exchange Commission (SEC) considers tokens and other digital assets to be securities. This makes them subject to federal securities law, including the Securities Act of 1933 and the Securities Exchange Act of 1934. This classification has significant implications for businesses engaging in token offerings. Understanding crypto securities law and keeping close tabs on new legal developments is critical.

Understanding the Howey Test Crypto Framework

Crypto assets may be considered securities if they are offered or sold as investment contracts. The Howey test is one of the most widely used tests for determining what qualifies as a security. The decision is decades old and has been further fine-tuned over the years. It has proven applicable to a wide range of instruments, including tokens.

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