The chair of the United States Securities and Exchange Commission has said that every cryptocurrency project should be considered as a security.
Gary Gensler told New York Magazine that projects “are securities because there’s a group in the middle and the public is anticipating profits based on that group”. This would bring them under its remit.
However, lawyers have hit back at the practicalities of this on Twitter. They argue that the SEC does not have the resources to regulate every cryptocurrency, and that this would stifle innovation in the industry.
MicroStrategy co-founder and executive chairman Michael Saylor’s tweet about the news being welcomed was met with agreement by Jake Chervinsky, a lawyer and policy lead at Blockchain Association. Chervinsky indicated that to follow through on this would be impractical for the SEC.
Gabriel Shapiro, general counsel at investment firm Delphi Labs, rebuked Chair of the U.S. Securities and Exchange Commission (SEC) Jay Clayton’s recent statement that every digital asset that is not bitcoin is a security.
“Chair Gensler may have prejudged that every digital asset aside from bitcoin is a security, but his opinion is not the law,” Shapiro tweeted. “The SEC lacks authority to regulate any of them until and unless it proves its case in court. For each asset, every single one, individually, one at a time.” If Gensler’s statement were to hold true, more than 12,300 tokens currently in circulation would become illegal.
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