The Securities and Exchange Commission (“SEC”) recently issued highly anticipated guidance to assist market participants in determining whether a digital asset is offered and sold as a security.
On April 3, 2019, the SEC’s Strategic Hub for Innovation and Financial Technology published an analytical framework for evaluating whether the offer and sale of a digital asset is an “investment contract” and therefore a security subject to regulation under the federal securities laws. On the same day, the Division of Corporation Finance issued a no-action letter permitting TurnKey Jet, Inc. to offer and sell digital assets without registering or qualifying for an exemption under the Securities Act of 1933 or the Securities Exchange Act of 1934.
Our analysis of the no-action letter and the framework is available here.