XCH Is Not a Security, SEC Registration Plans In Progress – Chia CEO
Recently, the founder of the Chia network, Gene Hoffman, has argued that XCH, the platform’s native cryptocurrency, is not a security. His stance is controversial, as many have argued that XCH’s high-risk, high-reward nature makes it a security.
In response to this criticism, Hoffman stated that XCH is still unavailable to the public, a vital component of the Howey Test, which determines whether an investment product is a security. By not being sold to the public, XCH does not meet the criteria of a security token, and therefore, Hoffman argues, the token is not a security.
Hoffman Defies SEC Chairman’s Stance On XCH Token
Hoffman has also stated that Chia plans to register with the Securities and Exchange Commission (SEC) to clear up any potential confusion regarding the status of XCH. This is a sensible move, as it will provide the legal framework to ensure that the cryptocurrency operates in a compliant manner and that investors are adequately informed and protected.
Gary Gensler, SEC Chairman, recently opined that “except for Bitcoin, every other digital currency is a security.” However, Hoffman argued that XCH does not fall under the category of securities as defined by the Howey Test, as it is still inaccessible to the public.
According to the Howey Test, a token is regarded as security when there is an ‘investment of money in a common enterprise with an optimistic outlook of gains from the actions of other people.’
Chia To File For XCH Registration
Meanwhile, Hoffman stated that the firm intends to file Chia shares with the SEC soon. Nevertheless, a previous Ripple software engineer, Matt Hamilton, noted that registering shares did not keep the SEC from taking action against Ripple.
Compared to Ripple’s situation, Hoffman clarified that Chia’s case differs since Ripple had not sold XRP with a registration statement. He remarked, “it is possible that selling a token without a registration statement may turn it into a security. So, don’t sell them until you have a registration statement.”
Hoffman commented that it wouldn’t be a shock if Ripple lost its lawsuit against the SEC, as no registration statement was submitted when XRP was available for sale. Ultimately, it will be up to the SEC to decide whether XCH is a security.
In the meantime, Chia is taking the necessary steps to ensure that its cryptocurrency complies with regulatory policies and provides investors with the protections they need.
Tokenhell produces content exposure for over 5,000 crypto companies and you can be one of them too! Contact at info@tokenhell.com if you have any questions. Cryptocurrencies are highly volatile, conduct your own research before making any investment decisions. Some of the posts on this website are guest posts or paid posts that are not written by Tokenhell authors (namely Crypto Cable , Sponsored Articles and Press Release content) and the views expressed in these types of posts do not reflect the views of this website. Tokenhell is not responsible for the content, accuracy, quality, advertising, products or any other content or banners (ad space) posted on the site. Read full terms and conditions / disclaimer.
