SEC Framework and No-Action Letter Provide Guidance on Analyzing Whether a Digital Asset is a Security

11 April 2019
View Debevoise Update
Key takeaways:
  • On April 3, the SEC released a “Framework for ‘Investment Contract’ Analysis of Digital Assets” to assist in analyzing whether a digital asset is a security.
  • Along with the release of this framework, the SEC also released its first no-action letter publicly agreeing with the view that the digital asset described therein is not a security.
  • Although a welcome step by the SEC to continue to clarify its position on digital assets, this framework largely reiterates what market participants already expected to be the relevant factors for determining whether a digital asset is a security and continues to leave questions unanswered.