Lawyers Oppose SEC Chair’s Assertion That All Crypto Is Securities Bar Bitcoin
The US Securities and Exchange Commission (SEC) chairman, Gary Gensler, reiterates that all crypto assets are securities except Bitcoin. However, lawyers disagreed with the agency’s latest notion about classifying all digital assets as securities.
Crypto As Security
According to recent reports, the SEC chair stated in an interview that he considers all crypto assets as securities subject to US securities laws. However, even as crypto assets are yet to be officially classified in the United States, Gensler reiterates that every virtual token aside from Bitcoin is a security.
According to Gensler, the individuals behind the development of crypto projects and networks are attempting to lure unsuspecting investors into buying their tokens. He added that the creators adopt complex legal mechanisms to promote their virtual assets and entice investors.
Based on the SEC’s chair opinion, at its most basic level, the tokens are securities because they are managed by a group of individuals, with the public anticipating huge returns, as stated by the creators.
As expected, Gensler’s latest statement has ruffled feathers across the digital asset industry, with the chief policy officer at the Blockchain Association, Jake Chervinsky, also a lawyer, stating that the opinions of the SEC chair are not the law.
Chervinsky argued that Gensler and the SEC needed more authority to oversee the crypto industry until they could prove their competence in court. He added that for every single asset, the regulator must be able to prove that it is a security.
Hester Peirce, an SEC commissioner, has previously urged the US Congress to accelerate the implementation of legislative and official classification of digital tokens. While waiting for this to happen, regulators like the SEC will continue their enforcement actions as they have been doing since the start of the year.
Moreover, in response to the regulator’s Kraken crackdown, Peirce believes that using enforcement actions to compel people to comply with the law in an emerging industry like crypto is not an effective or fair move to ensure regulation.
Thus, the SEC will continue its war against the crypto industry till a robust regulatory framework is implemented.
Market Outlook
Meanwhile, the crypto market remains range-bound for most of February despite the news, following weeks of incremental growth at the start of the year. At the time of writing, the largest crypto token by market cap, Bitcoin, is down 0.2% and currently trades at $23,327, with Ethereum also seeing a 0.6% decrease to trade at $1,625, as revealed by CoinGecko data.
Meanwhile, the broader industry has seen price consolidation since the start of the year, with experts expecting a possible bull rally.
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