SEC’s Amy Starr Defines The Differences Between Utilities and Securities

Amy Starr, the commissioner for the SEC, has defined highly relevant news for American crypto users today. Along with chairman Jay Clayton, Starr has answered the difference between securities and utilities in a panel meeting in Atlanta.

According to her, the difference is based on a spectrum and not on how the company calls the token. Starr told the panel that the SEC is the authority that will define which is which, not the company.

How Did Amy Starr Defined Utility Tokens?

The SEC Commissioner stated that a security is defined by the Howey Test for investor contracts, while utility tokens are not. In fact, if you buy the token only to use it in an existent platform and you have no choice but to use the token there, the token would be a utility and not a security.

According to Starr, the key to defining which is which is to focus on facts and circumstances which are to be determinant to know whether the token is being developed for a platform or as a security. If the token will be used on a platform with no secondary trading, then it can be considered a utility.

Starr’s declaration is somewhat contradictory with previous statements from the SEC, that told the press that most ICOs were securities. Could this signify an ease in the pressure that the regulation for cryptos is having? Cryptos are still in a gray zone, but there is no doubt that the SEC will move to clear more issues like this one in the future.

Ethereum NOT a Security: SEC Announces Ether (ETH) Crypto Token Ruling

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