The Securities and Exchange Commission (SEC) and other US market regulators are getting serious about dominating the crypto market. The SEC is trying to define which cryptocurrencies can be classified as securities. Meanwhile, an altcoin manager shared his point of view. Here are the details…
Hoffman: These altcoin projects are securities
Some regulators say that since the launch of Bitcoin (BTC) in January 2009, cryptocurrency has become the “Wild West” of financial markets. The May collapse of stablecoin TerraUSD wiped out more than $600 billion in value. It caused a series of bankruptcies. The Biden administration responded by drawing up a crypto development framework that includes approvals for crypto regulation. Meanwhile, industry folks are sharing their thoughts on what is and isn’t a security.
Gene Hoffman, CCO of blockchain project Chia coin, shared his point of view to clear up some of this confusion in recent tweets. Hoffman specifically pointed to Bitcoin (BTC), Litecoin (LTC), Dogecoin (DOGE), and XChange Coin (XCH). He stated that they are not securities. He then claimed that all these cryptocurrencies were “always” securities, citing Ethereum (ETH), XRP, FTX Token (FTT), Solana (SOL), Avalanche (AVAX) and Cardano (ADA) coins.
Hoffman: SEC will win Ripple case
Hoffman, a veteran technology executive, also explained that beyond trying to classify different coins as securities or securities, projects should not be based on legally selling their tokens or coins to investors in the US to raise funds. Instead, there are well-known ways to do it without putting potential investors at risk. As we reported on cryptokoin.com, Hoffman also predicted that the SEC would soon win the legal battle against Ripple.
According to him, a federal judge will eventually conclude that XRP is a security. While cryptocurrencies certainly have the characteristics of securities, it is important to note that not all cryptocurrencies are necessarily securities. Bitcoin in particular is generally considered to be decentralized and insecure. That is, it does not provide investors with a share of ownership in a project or part of the profits generated by the project venture.
However, as reported, John Reed Stark, former head of the Securities and Exchange Commission’s Internet Enforcement Office, recently suggested that the flagship cryptocurrency should also be classified as a security. Also, the SEC announced in May that it had nearly doubled its Crypto Assets and Cyber Unit. Since then, the SEC, the Commodity Futures Trading Commission (CFTC), and the Department of Justice (DOJ) have become more active in crypto enforcement.