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SEC Expands on Its Digital Asset Guidance: At Inception, (Nearly) Every New Token Is a Security

By Colin D. Lloyd, Pamela L. Marcogliese, Michael H. Krimminger, Giovanni P. Prezioso, Zachary Baum & Jim Wintering on April 5, 2019
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On April 3, 2019, staff of the Securities and Exchange Commission released (1) a framework providing principles for analyzing whether a digital asset constitutes an investment contract, and thus a security, as defined in SEC v. W.J. Howey Co. and (2) a no-action letter permitting TurnKey Jet, Inc., without satisfying registration requirements under the Securities Act of 1933 and the Securities Exchange Act of 1934, to offer and sell “tokenized” cards that are recorded on a permissioned blockchain and can be used for the limited purpose of purchasing air charter services.

The framework and no-action letter are a logical expansion of prior SEC statements and actions applying Howey to digital assets, but raises important interpretative issues for newly issued digital assets.

Please click here to read the full alert memorandum.

Photo of Pamela L. Marcogliese Pamela L. Marcogliese

Pamela L. Marcogliese’s practice focuses on corporate and financial transactions, particularly capital markets matters and corporate governance matters.

Read more about Pamela L. MarcoglieseEmail
Photo of Michael H. Krimminger Michael H. Krimminger

Michael H. Krimminger’s practice focuses on U.S. and international banking and financial institutions.

Read more about Michael H. KrimmingerEmail
  • Posted in:
    Privacy & Data Security
  • Blog:
    Cleary Cybersecurity and Privacy Watch
  • Organization:
    Cleary Gottlieb Steen & Hamilton LLP
  • Article: View Original Source

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