Non-security assets are digital assets that do not qualify as securities under established legal and regulatory definitions. These assets typically do not represent an investment contract, ownership in a common enterprise, or an expectation of profit derived from the efforts of others. Examples often include pure utility tokens that grant access to a network or service, or certain cryptocurrencies used primarily as a medium of exchange. Their classification is critical because it determines the regulatory framework under which they operate, impacting issuance, trading, and custody requirements.
Context
The discussion around non-security assets is highly prominent in regulatory circles, particularly concerning the classification of various digital tokens. A key debate involves the application of existing securities laws to novel digital asset structures and the need for clear, consistent guidance from regulatory bodies. Future developments will likely include more explicit legal definitions and frameworks for digital assets, potentially leading to greater clarity for market participants and innovators.
The rescission of the expanded safeguarding requirement immediately mitigates systemic operational risk for broker-dealers and RIAs holding non-security crypto assets.
The joint regulatory clarification enables federally registered exchanges to integrate spot crypto markets, fundamentally altering US digital asset market structure.
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