Whether or not cryptocurrency is a security is a bit of a gray area right now. To back up a little, generally, a "security" in finance is anything that represents a value and can be traded. Stocks are securities because they represent ownership in a public company. Bonds are securities because they represent a debt owed to the bondholder. And both of these securities can be traded on public markets.
Regulators are increasingly starting to signal cryptocurrencies should be regulated similarly to other securities, such as stocks and bonds. But this take is receiving pushback; scholars, legal firms and some of the biggest players in the crypto industry have argued against this, claiming the rules that apply to stocks and bonds, for example, don't apply as broadly to cryptocurrencies.
Most recently, the Securities and Exchange Commission set its sights on crypto staking, arguing the rewards earned via staking should be registered as securities
[2]
. In Feb. 2023, the SEC forced crypto exchange Kraken to shutter its staking program, alleging Kraken failed to register its staking offering as a security.
Whether the SEC will treat cryptocurrencies, or specific types of cryptocurrencies, as securities will be at the forefront of crypto regulation, and could have major implications for the asset class in the near future.
Regulators are increasingly starting to signal cryptocurrencies should be regulated similarly to other securities, such as stocks and bonds. But this take is receiving pushback; scholars, legal firms and some of the biggest players in the crypto industry have argued against this, claiming the rules that apply to stocks and bonds, for example, don't apply as broadly to cryptocurrencies.
Most recently, the Securities and Exchange Commission set its sights on crypto staking, arguing the rewards earned via staking should be registered as securities
[2]
. In Feb. 2023, the SEC forced crypto exchange Kraken to shutter its staking program, alleging Kraken failed to register its staking offering as a security.
Whether the SEC will treat cryptocurrencies, or specific types of cryptocurrencies, as securities will be at the forefront of crypto regulation, and could have major implications for the asset class in the near future.