Altcoin: The Securities and Exchange Commission (SEC) has classified 9 altcoin projects listed on Coinbase as securities.
SEC decides on securities for 9 altcoins
The SEC has announced that 9 altcoin projects named in an investigation related to Coinbase have security status. Related cryptocurrencies:
- Amp (AMP)
- DerivaDAO (DDX)
- XYO Network (XYO)
- Rari Governance (RGT)
- LCX (LCX)
- Power Ledger (POWR)
- DFX Finance (DFX)
- Chromatica (CHROM)
The petition in which the above cryptocurrencies are seen as securities is from a lawsuit filed against former employees at Coinbase accused of insider dealing. In its SEC complaint, it said:
Our message regarding these allegations is clear: fraud is fraud, whether it happens on Blockchain or Wall Street, it is fraud.
This development is one of several instances where the SEC has designated certain cryptocurrencies as securities. According to the complaint filed today, the SEC seems mostly tied to its stance that the majority of cryptocurrencies are securities. According to Gurbir Grewal, director of the SEC’s Enforcement Division,
We are not concerned with labels, but rather with the economic realities of a proposal. In this case, the facts confirm that some of the crypto assets in question are securities and that the defendants allegedly participated in traditional insider trading before the assets were published on Coinbase. These securities, we will continue to provide equal conditions to investors.
Coinbase is responding
Coinbase published a blog post in response to the SEC filing. Today, it was stated that US laws need to be updated as they cannot keep up with the digital age. “Crypto Securities Market Awaits Opening. Excerpt from the post titled “But First We Need Applicable Rules”:
Cryptocurrencies as securities need an updated rulebook to guide safe and efficient practices. Non-secure cryptocurrencies need the certainty of staying outside these rules. Anything else will have the effect of consolidating established technologies at the expense of innovation.
Coinbase has also asked it to create regulations for what it calls “digital asset securities” in a petition. According to Coinbase, it will be necessary to scrutinize how cryptocurrency differs from traditional financial assets and what measures will actually protect investors who trade cryptocurrencies in order to develop such complete guidelines.
The exchange also said that the US would benefit if the SEC encourages the use of cryptocurrencies while enforcing regulations:
If they don’t, others will and the US may not be able to catch up.
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