Part 5/11:
- Securities are financial instruments, such as stocks or certain tokens, that are regulated under securities laws. They often rely on investment contracts, characterized by an expectation of profit derived from the efforts of others.
Most other cryptos, especially Ethereum and the tokens issued during ICOs, are at risk of falling under the security classification. The expert points out that many of these tokens are controlled by groups of developers, launched via initial coin offerings (ICOs), and might involve pre-mines—all factors that align with the legal definition of securities.