Crypto lawyers question SEC Chair over claims of crypto being security
- Crypto lawyers have criticized the U.S. SEC Chair’s comments. The SEC Chair claimed that every cryptocurrency except Bitcoin is a security subject to its jurisdiction.
- So far, SEC has either fined token creators or delisted them.
Cryptocurrency lawyers have criticized the comments made by the head of the U.S. Securities and Exchange Commission, who claimed in a recent interview that every cryptocurrency except Bitcoin is a security subject to its jurisdiction.
In a recent New York Magazine interview about cryptocurrency, Gary Gensler, the chair of the Securities and Exchange Commission (SEC), stated that every crypto token other than Bitcoin falls under the agency’s jurisdiction.
Other crypto projects, he says, are securities because there is a group in the middle and the public expects profits based on that group, which is not the case with Bitcoin.
Crypto lawyers point towards SEC’s limitations
Despite this, Jake Chervinsky, policy lead at Blockchain Association, a cryptocurrency advocacy group, said on Twitter that Gensler’s opinion is not the law even if he might be well-versed with the crypto.
He added that the SEC lacks authority to regulate any token until and unless it proves its case in court for its jurisdiction over each individual token.
Logan Bolinger, a lawyer, also weighed in on the matter, tweeting that Gensler’s opinions on what is or isn’t a security, are not legally dispositive, that is, they are not the final legal determination.
Jason Brett, the policy lead at the advocacy body Bitcoin Policy Institute, stated that Gensler’s comments “shouldn’t be celebrated, but feared.”
Gabriel Shapiro, general counsel at investment firm Delphi Labs outlined the seemingly impossible enforcement, the SEC would have to carry out on the industry to cement its rule, in a series of tweets.
According to Gensler, over 12,300 tokens worth approximately $663 billion are unregistered securities that are illegal in the United States, and as Chervinsky mentioned, the agency would have to file a lawsuit against each token creator.
According to Shapiro, the SEC handled cryptocurrency in two ways: fining token creators and requiring the issuer to register, or fining them and ordering the created tokens to be destroyed and delisted from exchanges.