Cryptocurrencies Are Securities

One problem with cryptocurrency has been that the lack of regulation has led to several incidents of fraud. Recently, a Federal judge ruled that cryptocurrencies are securities and thus fall under the regulation of the SEC. Whether an asset is a security falls under the "Howey Test," that is whether it is an investment in a common enterprise and profits are earned from others' efforts. The SEC has announced that bitcoin and ether are exempt from regulation. A common argument from cryptocurrency founders is that the offer a promise to a network, platform, or service instead of profits.