The Latest Crypto Policy Developments and Kin’s Potential as a Utility Token

Break­ing Down the Lat­est Cryp­to Pol­i­cy Devel­op­ments and Kin’s Util­i­ty Case

The land­scape of cryp­tocur­ren­cy reg­u­la­tion in the U.S. is shift­ing rapid­ly, large­ly due to Trump’s admin­is­tra­tion tak­ing a pro-cryp­to stance. On Jan­u­ary 23, 2025, an exec­u­tive order was signed ban­ning Cen­tral Bank Dig­i­tal Cur­ren­cies (CBD­Cs) while pro­mot­ing a fed­er­al frame­work for cryp­tocur­ren­cy reg­u­la­tion. This marks a clear piv­ot away from past reg­u­la­to­ry uncer­tain­ty and sig­nals a push to legit­imize decen­tral­ized dig­i­tal assets.

SEC’s Crypto Task Force: A Strategic Pivot Toward Clarity

Launched on Jan­u­ary 21, 2025, the SEC’s Cryp­to Task Force aligns with this broad­er pol­i­cy shift. Instead of rely­ing on enforce­ment actions against cryp­to firms, the task force is focused on cre­at­ing a clear clas­si­fi­ca­tion sys­tem for dig­i­tal assets.

Evi­dence sug­gests that Kin ($KIN), which set­tled with the SEC in 2020 after a legal bat­tle over its ICO, is no longer con­sid­ered a secu­ri­ty under this new frame­work. While there hasn’t been a pub­lic con­fir­ma­tion that Kin falls under a new­ly intro­duced “pay­ment token” cat­e­go­ry, ear­ly leaks and indus­try dis­cus­sions sug­gest this could be the case. This dis­tinc­tion would remove Kin from the uncer­tain­ty sur­round­ing secu­ri­ties reg­u­la­tion and posi­tion it as a true util­i­ty token for peer-to-peer pay­ments.

New SEC Rules on Meme Coins and Market Implications

A major reg­u­la­to­ry update on Feb­ru­ary 27, 2025, offi­cial­ly declared that most meme­coins (such as “Trump tokens”) are not secu­ri­ties. This means they do not require SEC reg­is­tra­tion and can con­tin­ue to trade freely with­out fac­ing the same scruti­ny as secu­ri­ties-based dig­i­tal assets.

This rul­ing is cru­cial because it indi­cates that the SEC is mov­ing away from over­reg­u­lat­ing dig­i­tal assets and is will­ing to dif­fer­en­ti­ate between spec­u­la­tive assets and those that func­tion as cur­ren­cies or util­i­ties. If memecoins—many of which lack inher­ent function—are not secu­ri­ties, then a cryp­tocur­ren­cy like Kin, which has an active ecosys­tem and clear util­i­ty, should log­i­cal­ly be rec­og­nized as a util­i­ty token.

How the Howey Test Supports Kin as a Utility Token

The Howey Test is the legal frame­work used to deter­mine whether an asset qual­i­fies as a secu­ri­ty under U.S. law. For an asset to be con­sid­ered a secu­ri­ty, it must meet all four prongs of the test:

1. Invest­ment of Mon­ey – Did investors buy the asset with the expec­ta­tion of mak­ing a prof­it?
2. Com­mon Enter­prise – Are the prof­its tied to a sin­gle com­pa­ny or entity’s efforts?
3. Expec­ta­tion of Prof­its – Do buy­ers expect the asset’s price to increase pri­mar­i­ly due to the efforts of oth­ers?
4. Efforts of Oth­ers – Is the asset’s suc­cess depen­dent on the man­age­r­i­al or entre­pre­neur­ial efforts of a spe­cif­ic group?

Why Kin Fails the Howey Test (and Should Not Be Considered a Security)

• No Cen­tral Issuer Promis­ing Prof­its → Kin is ful­ly dis­trib­uted, with no ongo­ing con­trol by Kik Inter­ac­tive (which was sued by the SEC in 2019 but set­tled in 2020). Unlike a stock or invest­ment con­tract, Kin is not backed by a com­pa­ny guar­an­tee­ing returns.
• Used for Trans­ac­tions, Not Just Spec­u­la­tion → Kin is active­ly used with­in appli­ca­tions like Code Wal­let and Flipchat for real-world peer-to-peer exchanges, tip­ping, and in-app pur­chas­es. This dis­tin­guish­es Kin from invest­ment-dri­ven tokens.
• Does Not Rely on the “Efforts of Oth­ers” → The Kin Foun­da­tion no longer gov­erns the token, and its ecosys­tem con­tin­ues to grow through inde­pen­dent devel­op­ers and third-par­ty apps. This means Kin’s util­i­ty is decen­tral­ized, not depen­dent on a company’s ongo­ing work.

Since Kin does not meet all four prongs of the Howey Test, it should not be clas­si­fied as a secu­ri­ty under the law. Instead, the SEC’s new focus on dis­tin­guish­ing assets by their func­tion sup­ports Kin’s clas­si­fi­ca­tion as a util­i­ty token or pay­ment token.

Why This Matters: The Future of Kin and Utility Tokens

With the Trump admin­is­tra­tion back­ing cryp­to-friend­ly poli­cies and the SEC mov­ing toward struc­tured dig­i­tal asset clas­si­fi­ca­tions, Kin is in a prime posi­tion to be offi­cial­ly rec­og­nized as a non-secu­ri­ty, pay­ment-focused cryp­tocur­ren­cy.

If Kin receives for­mal recog­ni­tion as a util­i­ty token, we could see:
✅ Greater adop­tion by busi­ness­es and devel­op­ers with­out reg­u­la­to­ry fear.
✅ Exchange list­ings and deep­er liq­uid­i­ty, since secu­ri­ties clas­si­fi­ca­tion is a major bar­ri­er for many cryp­to plat­forms.
✅ Kin being posi­tioned as a micro­trans­ac­tion and dig­i­tal cash solu­tion, thanks to its fast and low-cost trans­ac­tions.

As the SEC final­izes its cryp­to tax­on­o­my, Kin’s unique char­ac­ter­is­tics and real-world func­tion­al­i­ty make it an ide­al can­di­date for the first offi­cial “util­i­ty token” recog­ni­tion in the U.S..

This could mark a turn­ing point for Kin, trans­form­ing it from a long-over­looked asset into a rec­og­nized dig­i­tal pay­ment token at the heart of the new reg­u­la­to­ry frame­work.