Every
offer
or
sale
of
a
security
must
be
registered
with
the
SEC,
absent
an
exemption.
This
raises
two
problems
for
crypto
asset
issuers.
First,
it
is
unclear
whether
any
given
crypto
asset
is
a
security.
Second,
the
current
registration
process
and
issuer-specific
exemptions
are
onerous
and
incompatible
with
the
characteristics
of
many
crypto
asset
offerings.
The
term
“security”
is
defined
to
include,
among
other
things,
any
stock,
note,
bond
or
investment
contract.
Federal
courts
have
consistently
held
that
crypto
assets,
in
and
of
themselves,
are
not
securities,
but
may
be
sold
as
the
object
of
an
investment
contract
security.
Of
course,
instruments
such
as
common
stock
and
warrants
are
securities
whether
issued
in
tokenized
form
or
not.
But
the
most
widely
traded
crypto
assets
more
closely
resemble
currencies,
trading
cards
and
other
commodities
that
ordinarily
fall
outside
of
the
security
definition.