What is a cryptocurrency & how does it work?

A cryptocurrency is a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend. Many cryptocurrencies are decentralized networks based on blockchain technology—a distributed ledger enforced by a disparate network of computers.

Is bitcoin a security?

SEC Chair Jay Clayton has clarified that bitcoin is not a security. “Cryptocurrencies are replacements for sovereign currencies… [they] replace the yen, the dollar, the euro with bitcoin. That type of currency is not a security,” he said in an interview with CNBC. What makes a crypto coin a security?

Are crypto assets securities?

To argue that crypto assets are securities, the SEC has relied on a U.S. Supreme Court case from 1946. The case dealt with investors in Florida orange groves owned by the W. J. Howey Co.

What is a digital security token?

A digital security token is no different, except it is digital and has gone through a blockchain tokenization process. Most security token platforms use the Ethereum ERC 2.0 or Tezos' FA1.2 standards for generating tokens.