The Securities and Exchange Commission (SEC) has been tasked with regulating the cryptocurrency market, including initial coin offerings (ICOs). Clearly, however, this will not be an easy task.
The SEC took a long time to decide whether cryptocurrencies should be treated as commodities or securities. This is because there is no legal definition for the two articles in the US Constitution. Therefore, the SEC must rely on its own interpretation of these provisions. To do this, he classified cryptocurrencies into two different categories: utility tokens and security tokens respectively.
Utility tokens: These are treated like any other utility token in the US: they can be used to access a service or product, but are not themselves considered financial products. They have no value other than their function as a means of accessing a service or product. Security tokens: These are treated like any traditional security, meaning they have a fixed value and represent ownership over assets owned by another party (a company, a author or individual). Holders of these tokens will receive dividends