Bloomberg Law
Feb. 8, 2019, 7:37 PMUpdated: Feb. 8, 2019, 10:04 PM

Securities Test May Not Help Classify Crypto, SEC’s Peirce Says (1)

Andrew Ramonas
Andrew Ramonas
Securities Regulation Reporter

A decades-old test deployed to determine whether a financial instrument is a security may not work for some cryptocurrency projects, SEC Commissioner Hester Peirce said Feb. 8.

The Securities and Exchange Commission needs to “tread carefully” when it approaches digital assets through the Howey test, the Republican said at the University of Missouri School of Law. The framework emerged from a 1946 Supreme Court decision.

“My antennae will go up when apparently legitimate projects cannot proceed because they’re concerned about the securities laws and they believe they can’t proceed in a way that’s consistent with the securities law,” Peirce said. ...