#SECGuidance
The SEC regulates crypto currencies as securities if they meet the **Howey Test**: an investment in a common enterprise with profit expectations from others’ efforts. Bitcoin and Ether are typically not securities, but many ICO tokens and stable coins are, requiring SEC registration or exemptions. Issuers must disclose risks, business details, and financials to protect investors. Non-compliance risks enforcement, with 26 crypto-related actions in 2023 targeting fraud and unregistered offerings (e.g., Ripple, Kraken). Platforms trading crypto securities must register as broker-dealers or exchanges. Recent 2025 guidance clarifies stable coin disclosures and emphasizes custody controls and audited financials. The SEC warns of crypto’s volatility and fraud risks, urging robust investor protections. While critics seek clearer rules, the SEC applies existing laws, though a crypto-friendly administration may shift priorities.