Legal Tests for Securities Classification

Legal Tests for Securities Classification are a set of frameworks developed by regulators and courts to determine whether a financial instrument or digital asset (like a token) qualifies as a “security” under the law. This classification is critical because securities are subject to strict regulations related to issuance, trading, disclosure, investor protection, and licensing.

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🔍 What Are Legal Tests for Securities Classification?

These legal tests are judicial or regulatory criteria used to assess the nature of a given financial instrument. If an instrument is classified as a security, its issuance, distribution, and trading must comply with securities laws, including registration requirements or exemptions.

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