The SEC Claims These 68 Cryptocurrencies Are Securities

The United States Securities and Exchange Commission (SEC) now considers 68 cryptocurrencies securities. The list of cryptocurrencies that are deemed securities by the SEC includes large market cap coins like BNB, Cardano, and Solana, as well as a number of smaller tokens like Amp, DerivaDAO, and Mirror Protocol.

The criteria for what constitutes security were first outlined in the Howey Test nearly a century ago. Very generally speaking, security is any financial instrument that can be used to raise capital and can be exchanged. 

The SEC believes that most cryptocurrencies fall within the securities classification, apart from Bitcoin, which it considers a commodity. Ethereum is another major digital asset that has been deemed “sufficiently decentralized” not to be a security by the SEC.

With that said, let’s look at which crypto assets the US regulator considers crypto securities. 

The full list of crypto securities according to the SEC

Starting in 2018 with the first SEC lawsuit accusing crypto industry players of breaking federal securities laws, the SEC has since mentioned 68 coins and tokens in various legal proceedings. Here’s a full list of crypto assets, which are securities according to the securities regulator.

The “Date” column shows the month when the SEC filed the lawsuit mentioning the digital asset.
*Telegram’s Gram is not to be confused with Toincoin (TON), which is the native asset of the Open Network open-source community-led project building on the foundation laid by the Telegram team.

In addition to the 55 cryptocurrencies listed in the table above, 13 Mirror Protocol assets have been categorized as securities as well, including Mirrored Alibaba Group Holding Limited (mBABA), Mirrored Alphabet Inc. (mGOOGL), Mirrored Amazon.com, Inc. (mAMZN), Mirrored Apple Inc. (mAAPL), Mirrored Invesco QQQ Trust (mQQQ), Mirrored iShares Gold Trust (mIAU), Mirrored iShares Silver Trust (mSLV), Mirrored Microsoft Corporation (mMSFT), Mirrored Netflix, Inc. (mNFLX), Mirrored ProShares VIX Short-Term Futures ETF (mVIXY), Mirrored Tesla, Inc. (mTSLA), Mirrored Twitter Inc. (mTWTR), Mirrored United States Oil Fund, LP (mUSO). Mirror Protocol is a Terra network-based crypto project that enables the creation of synthetics that track the price of real-world assets.

While the SEC has deemed 68 crypto assets to be securities so far, the list could expand drastically in the future. The criteria that apply to currencies like Cardano, Solana, and BNB, could just as well apply to thousands of digital assets that are currently outside of the regulator’s scope. However, the SEC might decide to keep its focus only on a couple of dozen of projects for the foreseeable future, leaving others outside the scope of any of its legal proceedings. 

YT VIDEO “SECURITIES”

A brief history of SEC lawsuits against cryptocurrency projects

The financial regulator has filed numerous lawsuits accusing blockchain companies of selling unregistered securities throughout the years. In the sections that follow, we are going to examine key developments and events that have shaped the crypto regulatory landscape.

ICO craze of 2017 and 2018

The first wave of SEC lawsuits started in 2018 after the initial coin offering (ICO) boom attracted the attention of the SEC. There are different arguments as to why the SEC started prosecuting crypto companies right around that time – however, the most common explanation is that the SEC got involved due to the sheer amount of funds invested in crypto projects by early investors. 

Perhaps the most prominent example of the SEC getting involved in an ICO campaign was Telegram’s GRAM token sale, which raised a whopping $1.7 billion from investors, making it one of the biggest token sales of all time. The SEC maintained that the sale of GRAM was unregistered. Telegram ultimately paid back investors and shut down the development on The Open Network (the project was later taken over by the community and the native token renamed Toncoin).

SEC vs. Ripple lawsuit

The SEC accusing Ripple and its founders of selling unregistered securities in December 2020 was arguably a pivotal moment in the history of crypto, at least from the regulatory perspective. After the SEC alleged that XRP was sold as an unregistered security, a number of crypto exchanges delisted XRP in fear of the SEC’s retaliation. 

The SEC vs. Ripple lawsuit is expected to end at some point in 2023. However, both Ripple and the SEC have shown a willingness to exhaust every legal avenue available to them at every step of the legal process, so it might take longer before we see the final verdict. Many experts believe that the verdict will become a precedent for similar cases and have far-reaching implications for the rest of the crypto sector.

SEC lawsuit against Binance and Coinbase

In early June 2023, the SEC filed two bombshell lawsuits against arguably the largest crypto exchange behemoths – Binance and Coinbase. The SEC accused both exchanges of listing unregistered securities without having the required securities exchange broker licenses. In addition, the SEC charged Binance with offering its own tokens, BNB and BUSD.

As a part of the lawsuits against Binance and Coinbase, the SEC named 19 cryptocurrencies as securities. In addition to the aforementioned BNB and BUSD, Cardano, Solana, Polygon, Cosmos, The Sandbox, and a dozen other cryptocurrencies were mentioned. 

The bottom line: The list of assets the SEC deems are crypto securities could drastically expand in the future

The criteria for what constitutes a security is very broad. While there are “just” 68 digital assets that have been specifically identified as securities by the SEC so far, there is no legal reason why the regulator couldn’t prosecute thousands of other cryptocurrencies as well. However, that could be unfeasible from a practical standpoint.

While there is no guarantee how the crypto regulatory landscape will shape up in the future, the best bet in the meantime would probably be to use reputable and safe crypto exchanges and to invest in cryptocurrencies with clear growth potential. 

If you are concerned about storing your digital assets on an exchange due to regulatory uncertainty, then you should consider buying a crypto hardware wallet and taking care of crypto custody into your own hands. In addition, if you don’t want to risk buying a crypto asset that could be identified as a security in the future, you could buy Bitcoin, which has been identified as a commodity by the SEC itself.