Law and Ledger is a news segment focusing on crypto legal news, brought to you by Kelman Law – A law firm focused on digital asset commerce.
The following opinion editorial was written by Alex Forehand and Michael Handelsman for Kelman.Law.
Is Crypto a Security? Why This Question Still Matters in 2025
The question of whether a crypto asset qualifies as a security is something that everyone working with digital assets is likely familiar with. It has been asked in crypto conferences, congressional hearings, SEC speeches, courtrooms, and thousands of legal memos since SEC v. W.J. Howey Co. became the doctrine of last resort for every new technology.
Yet in 2025, despite years of regulatory activity, the U.S. landscape is still fragmented and the answer remains unclear. Courts have increasingly rejected the idea that tokens are inherently securities, drawing distinctions between the asset itself and the context of its sale. Other rulings, however, have found investment-contract liability in situations far removed from the initial token generation event—even years later, long after decentralization milestones or utility features had been introduced.
While the SEC’s posture has shifted, the ambiguity remains. The agency’s broad enforcement approach since 2017 created a default assumption that nearly any token issuance might trigger securities laws.
More recently, however, there have been clearer signs of restraint, a greater willingness to negotiate exemptions or settlement parameters, and internal signals that the staff is now distinguishing between token design, token distribution, and token ecosystems in ways it did not fully articulate before.
However, formal guidance is still missing.
Congress continues debating comprehensive digital-asset legislation, yet no single bill has emerged with the consensus needed to preempt the judiciary or constrain the SEC. While the CLARITY Act continues to make its way through Congress, market participants are left operating in a patchwork of federal enforcement interpretations, civil case law, and a still-developing regulatory taxonomy.
This series of articles aims to bring clarity to what can realistically be known—and what can be defensibly done—in 2025. It distills the legal framework, highlights recent developments, and identifies practical takeaways for builders, investors, and intermediaries navigating this uncertain environment.
Part I will explain when securities laws apply to tokens, focusing on the mechanics and limits of the infamous Howey test.
Part II will explain the myth and reality of utility tokens.
Part III will analyze token transactions across their lifecycle, including when secondary-market trades fail to satisfy Howey despite earlier sales that may have.
Part IV will examine special contexts—DeFi protocols, staking arrangements, airdrops, NFTs, and hybrid models—where traditional tests strain under modern design choices.
Part V will survey the evolving regulatory landscape as 2025 closes: SEC enforcement patterns, CFTC positioning, and pending legislation.
Part VI will provide practical compliance guidance for exchanges, token issuers, developers, DAOs, custodians, payment firms, and others operating in the space.
The goal is not to offer certainty where none exists—but to translate doctrine, precedent, and regulatory practice into concrete, defensible steps for navigating U.S. securities law in a way that aligns with how enforcement and courts function in reality.
Staying informed and compliant in this evolving landscape is more critical than ever. Whether you are an investor, entrepreneur, or business involved in cryptocurrency, our team is here to help. We provide the legal counsel needed to navigate these exciting developments. If you believe we can assist, schedule a consultation here.