Aligning Tokens with U.S. Law

Alignment with Established Securities Law

U.S. securities law, refined over a century, offers clear precedents for determining what constitutes a security. Tokens granting rights to dividends, revenue shares, or liquidation proceeds are similar to traditional securities and should be regulated accordingly.

However, tokens that only offer price appreciation or redemption rights lack these critical characteristics. Therefore, applying established principles ensures regulatory decisions are consistent with historical practices, providing a solid foundation for both new and experienced market participants.

Proposed Legislative Adjustments

The current draft of the Financial Innovation and Technology for the 21st Century Act (FIT21) relies on decentralization metrics to classify tokens. However, this approach should be revised to reflect a more practical and consistent framework.

Additionally, removing decentralization as a defining criterion ensures that regulations are clearer and easier to enforce. Consequently, this adjustment would reduce unnecessary legal disputes, allowing stakeholders to focus on meaningful innovation rather than compliance uncertainties.