Crypto Rating Council
"Although the U.S. Securities and Exchange Commission has issued helpful guidance, whether any given crypto asset is a security ultimately requires a fact-intensive analysis by knowledgeable technical and securities law experts. This analysis is difficult and expensive to operationalize consistently, may involve judgment calls, and can lead to disagreement among legal experts (and even government officials).
This challenge prompted Coinbase to bring together several industry leaders and securities law experts to create a scalable, points-based rating system centered around a set of several dozen, yes / no factual questions. These questions are derived directly from SEC guidance and case law and are designed to address important characteristics that inform whether an asset is or is not a security. We also worked hard to focus our framework on objective, repeatable, fact-driven questions that can be answered consistently by technical experts across different assets and over time. The result of the analysis is a score which makes it easy for members to synthesize the analysis across many tokens and make their own, independent business decisions about whether or how to support an asset.
The Council’s analytical framework results in a score between 1 and 5. A score of 1 means the Council’s independent analysis suggests the asset has few or no characteristics consistent with a traditional regulated security. A score of 5 means the Council’s analysis suggests that an asset has many characteristics strongly consistent with treatment as a security."