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U.S. Securities Regulations Compliance

U.S. Securities Compliance for Tokens, Exchanges and Web3 Projects

U.S. securities law is the most aggressive regulatory environment for tokens, exchanges, DAOs and any Web3 project with even remote U.S. exposure. The SEC’s current enforcement posture is simple: treat almost every token as a security unless the issuer can prove the opposite. Digital Lawyers structures projects so they can withstand that assumption.

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Token Classification, the Howey Test and U.S. Law Legal Opinions

Table of contents
  • Token Legal Classification
  • Howey Test & SEC Risk Mitigation
1.

Token Legal Classification

When dealing with tokens with U.S. exposure the starting point is the legal classification of token. Our U.S. attorneys will run a full Howey test analysis considering the existing case law and based on the real mechanics of the token: governance rights, economic rights, passive income, distribution logic, marketing channels and user expectations.

2.

Howey Test & SEC Risk Mitigation

The analysis focuses on contribution of value, expectation of profit, reliance on identifiable managerial efforts and any feature that aligns the project with an investment scheme. If the model triggers securities characteristics, we adjust the structure or the distribution route to reduce exposure to SEC scrutiny where the facts allow it.

SEC and FinCEN Compliance for Token Offerings

Table of contents
  • Securities Exemptions
  • FinCEN and Money Transmission Rules
  • State-Level Money Transmission Licences
  • Ongoing Regulatory Monitoring
1.

Securities Exemptions

If the token or asset cannot be taken outside U.S. securities law, the offering is normally structured through a recognised exemption. For domestic offerings, Regulation D under Rule 506(b) or 506(c) is being used, with strict controls on communications and accredited-investor verification. For international offerings we use Regulation S with clear distribution restrictions to prevent flowback into the U.S. market.

2.

FinCEN and Money Transmission Rules

In addition to SEC, FinCEN, the U.S. Treasury’s financial-crime authority, regulates the activity around value transmission. If a project accepts and transmits value for another person (e.g., transmits, exchanges, or holds crypto on behalf of others), FinCEN treats it as money transmission and applies the Bank Secrecy Act. Any company that engages in money transmission must register as an MSB (Money Services Business) unless a clear exemption applies.

3.

State-Level Money Transmission Licences

In addition to federal regulations many states treat crypto transmission as money transmission under their own statutes, which may require a money-transmitter licence (MTL) in each state. This is a separate analysis from SEC securities classification and can apply even when a token is clearly not a security.

4.

Ongoing Regulatory Monitoring

Tokenomics, supply mechanics, staking rewards, treasury actions and governance changes can alter the regulatory profile of a project over time. Digital Lawyers monitors these changes and recalibrates the analysis so that protocol updates do not quietly create SEC or FinCEN exposure.

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FAQ

What is the SEC’s approach to tokens and Web3 projects?

The SEC treats almost every token as a security unless the issuer can prove otherwise. Digital Lawyers structures tokens, exchanges, and DAOs to withstand SEC scrutiny.

How do you classify a token under U.S. law?

We perform a full Howey Test analysis considering governance rights, economic rights, passive income, distribution logic, marketing channels, and user expectations to determine if a token qualifies as a security.

Do you coordinate multi-jurisdictional token classifications?

Yes, we map tokens across U.S. federal law, EU MiCA categories, UK crypto-asset classes, and Singapore’s Payment Services Act to provide a single, consistent classification for investors, exchanges, and partners.

What is included in a U.S. legal opinion for tokens?

Our U.S. legal opinions cover token classification, offering structure, decentralisation analysis, staking and yield mechanics, custody flows, and overall regulatory position, coordinated with UK and Singapore counsel when needed.

How do U.S. securities exemptions work for token offerings?

Domestic offerings typically use Regulation D (506(b) or 506(c)) with strict communication and investor verification rules. International offerings use Regulation S with clear distribution restrictions to prevent U.S. market flowback.

How does FinCEN regulate token activity?

If a project transmits, exchanges, or holds crypto for others, FinCEN treats it as money transmission under the Bank Secrecy Act. Registration as a Money Services Business (MSB) may be required unless an exemption applies.

Are state money transmitter licenses required?

Many U.S. states treat crypto transmission as money transmission under state law, which may require a separate MTL in each state, independent of SEC classification.

How do tokenomics and protocol updates affect compliance?

Token supply, staking, treasury operations, and governance changes can alter regulatory exposure. Digital Lawyers continuously monitors updates to prevent SEC or FinCEN risks.