Jenner & Block

Your Utility Token May be a Security: SEC Staff Members’ Remarks on Cryptocurrency

On January 22 and 23, 2018, key members of the SEC Staff and the SEC’s Chairman commented on cryptocurrency matters at the Northwestern University Pritzker School of Law’s 45th Annual Securities Regulation Institute in Coronado, California.  At the Institute, the SEC Staff and the SEC Chairman expressed their own views, and not the views of other members of the SEC Staff or the other Commissioners. What follows are high-level notes on some of these remarks. Based on the Staff’s remarks, issuers should not assume their token is not a security merely because the issuer has called the token a utility token, especially where the token’s value in a secondary market is emphasized in marketing. Further, there is a focus on the extent to which lawyers and other professionals must use judgment and serve as gatekeepers when advising cryptocurrency issuers.

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