Coin Center, a non-profit advocacy group that focuses on digital currency policy research, has a released a paper (Framework for Securities Regulation of Cryptocurrencies) outlining various approaches for tackling securities regulation in the digital assets space.

Peter Van Valkenburgh, Director of Research at Coin Center and author of the paper, explains how the Howey

Valkenburgh’s report goes into great detail on the different types of blockchains and the nuances of each system. Due to the complex nature of distributed ledger systems and the many variables involved, the report concludes that securities regulators should focus on digital assets that pose a threat to consumers such as pre-sold cryptocurrencies.

“Based on these variables, it is clear that there are colourable arguments that some cryptocurrency sales can be, in effect, security offerings.”

The report also concluded that closed-source digital assets and pre-mined cryptocurrencies would be considered securities under the Howey test:

“Open but heavily marketed pre-sales or sales of pre-mined cryptocurrencies with a small and non-diverse mining and developer community when the facts indicate that profits come primarily from the efforts of this discrete and profit-motivated group.”

Source: https://coincenter.org/wp-content/uploads/2016/01/CoinCenterSecuritiesFramework1.pdf

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