Research Summary

The report explores the potential of on-chain data in determining whether certain cryptocurrencies can be classified as securities. The report comes in response to recent regulatory actions by the SEC against crypto exchanges like Coinbase and Binance US, and the ongoing debate about the classification of digital assets. The report suggests that on-chain metrics could provide objective, measurable evidence to support such determinations, but also acknowledges that these metrics alone cannot definitively classify assets as securities.

Actionable Insights

  • On-chain metrics could provide objective evidence: The report suggests that on-chain data could be used to support determinations of whether certain cryptocurrencies are securities. This could be particularly useful given the ongoing regulatory uncertainty in the crypto space.
  • Comprehensive legal analysis is still required: Despite the potential utility of on-chain metrics, the report acknowledges that a comprehensive legal analysis is still necessary for classifying assets as securities. On-chain data can be one piece of the puzzle, but it is not a definitive tool.
  • Clearer regulations could lead to easier compliance measurement: The report suggests that clearer securities regulations could allow for easier measurement of compliance on-chain, which is a unique property of blockchains. This could pave the way for more transparent operations in the crypto industry.

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