Quote from: 5W-KILO on Today at 03:50:46 PM

What is a security?

A security in finance is any asset or financial instrument that represents some value in an industry and gives its holder some form of ownership.
For example if you invest in a stock or share of a company you own a percentage of the company, making the share a security

Quote from: 5W-KILO on Today at 03:50:46 PM

How can they tell which token or coin is security and which is not?

On research the best answer I got is that they consider which crypto is sufficiently decentralized and determines that it is not a security. I can only think that decentralized projects cannot give ownership cause there is no central point of control.

Quote from: 5W-KILO on Today at 03:50:46 PM

How will these exchanges know what they did wrong if there is nothing that proves that a particular token is security?

No clue. They declare more crypto tokens to be securities at intervals and exchanges can easily fault their regulations unknowingly. Or maybe they send a memo as at when they make it official, we can only speculate.

- Jay -