Paving the Way to a Sensible Token Disclosure Framework

From 2017 through the end of 2023, the total market capitalization of all digital assets rose from approximately $20 billion to approximately $1 trillion, with a peak of nearly $3 trillion in late 2021. In 2024, the total market capitalized rebounded to near all-time highs. Digital assets have been the subject of hundreds of headlines and dozens of hearings in both chambers of Congress. Federal and state regulators have issued guidance, proposed rules, and taken numerous enforcement actions related to digital assets. However, a 2022 report by the U.S. Government Accountability Office found that while blockchain technology and digital assets may offer potential benefits for both financial and non-financial applications, legal and regulatory uncertainties present a challenge to adoption. Without comprehensive, digital asset-specific legislation, various regulators have asserted a patchwork-yet overlapping-jurisdiction over digital assets and related activities based on their existing authority. This article surveys the existing regulatory landscape applicable to digital assets and discusses a sensible token classification and disclosure framework that is relevant, irrespective of which agency has jurisdiction over digital assets.