Ever bought a token and wondered whether it’s truly legal — or at risk of being classified as a security tomorrow? You’re not alone. The regulatory line between cryptocurrency and securities is murky, and many traders and projects fear being on the wrong side of the law. The uncertainty can paralyze decision-making and keep good ideas from growing.
In this article, I’ll demystify how the U.S. Securities and Exchange Commission (SEC) treats digital assets — which cryptos have already been deemed securities, which have been cleared, and what this means for you. By the end, you’ll understand why Bitcoin is considered non-security, the ambiguous status of Ethereum, the famous Ripple vs SEC case, and the broader list of tokens under scrutiny.
How the SEC Can Treat Cryptocurrencies as Securities
The U.S. Securities and Exchange Commission defines a “security” under the Howey Test, which asks whether there is an investment of money in a common enterprise with an expectation of profits derived from the efforts of others. In the crypto context, that means the SEC can argue a token sale was an offering of securities if investors expected profit from the efforts of the development team.
However, just labeling a token a “security” is not enough; to enforce that classification legally, the SEC (or courts) must make determinations in lawsuits or settlements. Some tokens are under threat, others have been litigated, and some have been cleared (or never sued). Regulatory clarity is still in flux.
Bitcoin (BTC): Generally Viewed as Not a Security
So far, Bitcoin (BTC) stands out as the clearest case: regulators generally consider it a commodity, not a security. The SEC has indicated that because Bitcoin is decentralized, without a central promoter whose efforts determine profit, it does not satisfy the Howey Test for most contexts.
This isn’t just regulatory talk — numerous SEC public statements and enforcement actions signify that Bitcoin operates outside the “security” framework. That gives BTC a favorable status in legal and institutional contexts.
Ethereum (ETH): Is It a Security or Not?
The status of Ethereum (ETH) has been debated fiercely. Early in its life, some viewed ETH as more likely to be a security because of its ICO origins and the centralized role of its developers. But over time, the Ethereum network has become more decentralized. The SEC has suggested that ETH is not a security in its current form, although no definitive legal ruling has made that universally binding.
Because ETH’s classification remains ambiguous, some platforms restrict certain features (like staking, derivatives, or lending) based on regulatory caution. But for many holders and traders, ETH operates more like a non-security asset, similar to BTC.
Ripple (XRP): The SEC Battle
Perhaps the most famous legal showdown is SEC vs Ripple Labs over XRP. In December 2020, the SEC sued Ripple, claiming that XRP sales constituted unregistered securities offerings. Ripple has pushed back, arguing XRP is a digital currency, not a security.
Over time, parts of the case have yielded mixed outcomes. In 2023, a court ruled that sales of XRP on public exchanges were not securities in certain contexts, while direct institutional sales were. Ripple’s status remains in flux, and many exchanges delisted or restricted XRP during the legal uncertainty. The case continues to affect how token issuers consider security classification.
Cryptos and Tokens Already Named as Securities
While many tokens hover in legal gray zones, a smaller subset have been explicitly flagged or settled with SEC claims. These include:
- Various ICO tokens sold directly to investors in presale rounds, often cryptos not widely listed publicly
- Tokens tied to yield / staking / profit-sharing mechanisms that emphasize investor return from project efforts
- In some cases, tokens associated with funds, trusts, or tokenized assets that closely mirror equity or debt structures
The U.S. SEC has alleged in multiple complaints that certain digital assets were offered and sold as “crypto asset securities.” In some matters courts have agreed (for specific transactions), in others litigation is ongoing, settled, narrowed, or the allegations were later withdrawn. The list below consolidates tokens expressly named in major SEC actions and filings. It is not a determination that the assets are always and everywhere “securities,” and outcomes can differ by transaction type and venue.
- SOL (Solana) — Alleged security in SEC complaints against Binance, Coinbase, and Kraken.
- ADA (Cardano) — Alleged security in Binance, Coinbase, and Kraken complaints.
- MATIC (Polygon) — Alleged security in Binance, Coinbase, and Kraken complaints.
- FIL (Filecoin) — Alleged security in Binance, Coinbase, and Kraken complaints.
- ATOM (Cosmos) — Alleged security in Binance and Kraken complaints.
- SAND (The Sandbox) — Alleged security in Binance, Coinbase, and Kraken complaints.
- MANA (Decentraland) — Alleged security in Binance and Kraken complaints.
- ALGO (Algorand) — Alleged security in Binance and Kraken complaints and in the Bittrex case.
- AXS (Axie Infinity) — Alleged security in Binance and Coinbase complaints.
- COTI — Alleged security in Binance and Kraken complaints.
- CHZ (Chiliz) — Alleged security in Coinbase and Kraken complaints.
- FLOW — Alleged security in Coinbase and Kraken complaints.
- ICP (Internet Computer) — Alleged security in Coinbase and Kraken complaints.
- NEAR — Alleged security in Coinbase and Kraken complaints.
- VGX (Voyager) — Alleged security in Coinbase complaint.
- DASH — Alleged security in Coinbase and Kraken complaints; also discussed in the Bittrex action.
- NEXO — Alleged security in Coinbase complaint (available via Wallet).
- OMG (OMG Network) — Alleged security in Kraken complaint; cited in Bittrex materials.
- TKN (Monolith) — Alleged security in Bittrex lawsuit.
- NGC (Naga) — Alleged security in Bittrex lawsuit.
- IHT (Real Estate Protocol) — Alleged security in Bittrex lawsuit.
- AMP — Named in SEC insider-trading/Wells-related token lists and referenced as prior enforcement in Binance filings.
- RLY (Rally) — Named in SEC’s insider-trading token list.
- DDX (DerivaDAO) — Named in SEC’s insider-trading token list; also referenced in Coinbase complaint as prior enforcement.
- XYO — Named in SEC’s insider-trading token list.
- RGT (Rari Governance) — Named in SEC’s insider-trading token list.
- LCX — Named in SEC’s insider-trading token list; Coinbase complaint references LCX in prior actions context.
- POWR (Powerledger) — Named in SEC’s insider-trading token list; Bittrex/SEC materials discuss POWR in securities analysis context.
- DFX — Named in SEC’s insider-trading token list.
- KROM — Named in SEC’s insider-trading token list.
- BNB — SEC alleged unregistered offers and sales connected to BNB in Binance action.
- BUSD — SEC alleged unregistered offers/sales related to BUSD and certain yield products.
- TRX (Tron) — Alleged security in SEC action against Justin Sun/Tron entities.
- BTT (BitTorrent) — Alleged security in the Justin Sun/Tron case.
- UST (TerraUSD) — Court found certain Terraform tokens (including UST) were offered and sold as securities (summary judgment); massive SEC settlement followed.
- LUNA — Addressed with UST in Terraform litigation as securities in certain offers/sales.
- LBC (LBRY Credits) — Court held LBRY’s offers and sales of LBC violated Section 5; context clarifies ruling addressed offers/sales.
- XRP (Ripple) — SEC alleged XRP sales were unregistered securities; court held institutional sales were securities while programmatic exchange sales were not; later resolution retained that split.
- REP (Augur) — Cited in SEC Binance briefing as a prior SEC enforcement-based “crypto asset security.”
Additionally, the SEC has pursued cases against token issuers such as Telegram (GRAM) and Kik (KIN), with courts and settlements treating their offers and sales as unregistered securities offerings under U.S. law (without an across-the-board ruling that the tokens are always “securities” in every context).
Some Binance allegations were later narrowed or dismissed, and broader SEC crypto enforcement posture has evolved in 2024–2025; always check the latest court orders and filings for the current status of any specific asset.
Summary
The question, which specific cryptocurrencies are securities — remains one of the most critical regulatory puzzles in digital assets. While the SEC has the authority to label tokens as securities, those designations often need legal confirmation through court rulings or settlements. Bitcoin is broadly viewed as non-security, Ethereum’s status is more ambiguous, and Ripple (XRP) remains under litigation. A handful of tokens tied to ICOs and yield mechanisms have explicitly been treated as securities by enforcement actions.
For investors, understanding these distinctions isn’t just academic — it shapes what assets you can safely hold, how exchanges list them, and how regulatory risk might affect your portfolio.
Which token’s classification do you find most intriguing or murky — ETH’s decentralization or XRP’s legal battle? How would you choose to invest if one of your holdings suddenly got labeled a security tomorrow? Share your thoughts — this conversation is just beginning.
