Date of Award


Document Type


Degree Name

Master of Laws (LLM)


Securities law in the United States has a unique approach to defining what is a security and what is not a security. It includes broadly defined terminology and describes several investment instruments that may be considered a security. Courts use one of two methods to determine whether an investment contract is a security: the Howey Test and the Risk Capital Test.

Initial Coin Offerings are one of the most recent instruments that courts and other governmental organizations need to examine in order to answer whether they meet the criteria of being a security. Depending on the result, the issuers may need to take certain actions, or they will have to bear the consequences. The Securities and Exchange Commission and the courts have been trying to interpret existing securities law in terms of this new instrument. However, courts, governmental institutions, companies, and individuals do not have specific answers as to whether or not these offerings are securities.

Since many Initial Coin Offerings remain within the area of securities law, there are solutions for issuers who want to avoid severe consequences. First, the Initial Coin Offeror can choose to apply for exemptions from registration. The issuer can also structure the token in such a way that courts and governmental institutions could not consider the token to be a security.