All Crypto Is Created Equal? That's What Regulators Seem to See

In the second half of 2018, security tokens became one of the most written about areas within the growing digital asset industry.

Publications have started to call 2019 the year of the security token.

What does that mean? Are all tokens created equal? The reality is that the term "Security token" is an overly broad designation which lumps digital assets and digital securities into a single bucket.

It's possible for a digital asset to convert to a digital security, and vice-versa, based on the facts and circumstances of the token.

Of course, securities regulators usually regard digital asset tokens as securities because they often involve purchasers investing money to acquire the token expecting to make profits from the efforts of others who use the purchasers' funds to develop the network.

Securities regulators might entertain arguments that, at some point in time, such digital asset tokens are no longer securities.

Therein lies the gray area whereby the SEC has stated that it's likely that most tokens are in fact securities and should adhere to applicable regulations.

A digital security, often referred to as a tokenized security, is essentially a traditional security that has been launched as a blockchain token.

These digital tokens are plainly intended to be securities and are subject to traditional securities laws.

Today, we see issuers of digital assets considering retroactively taking steps to meet security regulations in the U.S. and other jurisdictions.