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  1. Home
  2. /Glossary
  3. /Securities Classification
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traditional-finance

Securities Classification

The legal determination of whether a crypto token qualifies as a security under financial law.

Definition

The legal determination of whether a crypto token qualifies as a security under financial law. If it's classified as a security, it must follow strict regulations including registration, disclosure, and investor protection rules. The SEC has argued that most tokens besides Bitcoin and Ethereum are securities.

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Related Terms

Howey Test

The legal test the SEC uses to determine if something is a security.

Compliance

Following the laws and regulations that apply to financial activities, including crypto.

Accredited Investor

Someone who meets specific income or net worth thresholds set by regulators, qualifying them for investments not available to the general public.

Anti-Money Laundering (AML)

Laws and procedures designed to prevent criminals from disguising illegal funds as legitimate income.

Asset Allocation

How you divide your investments across different asset classes like stocks, bonds, crypto, and cash.

Blue Chip

A well-established, financially sound company or crypto project with a proven track record.

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