SEC Settles With TUSD Issuer Over Fraud Claims
3 months ago
A security token is a cryptocurrency version of a stock, bond, or any asset that is expected to increase in value, and is sold to investors as such. For example, token-issuing crypto hedge funds sell their coins as securities, with the expectation that the fund will perform well and the value of the token will rise, whereas regular tokens are, or should be, sold as utility tokens to be used on the proprietary platform. Security tokens are regulated in the same way as regular securities to ensure that investors are not drawn into fraudulent operations. This means they must pass the Howey test in order to be classified as securities and regulated as such by authorities like the U.S. Securities and Exchange Commission.