Token Classification and Securities Regulations
Classifying tokens correctly (utility vs. security) is critical to avoid regulatory penalties. Misclassification can lead to violations of securities laws, especially in jurisdictions like the U.S., where the SEC applies the Howey Test.
- Key Steps: Evaluating your tokenomics, consulting legal experts, and preparing necessary filings if the token is deemed a security.
- IBC’s Role: Conducting thorough assessments of token offerings and providing guidance on meeting securities law requirements for STOs or other fundraising methods.
