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Security Laws Should Apply to Most Cryptocurrencies, The SEC Now Declares

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The Securities and Exchanges Commission has, in recent times, come under sharp criticism for their ‘efforts’ to regulate the cryptocurrency market by classifying most crypto assets as securities. In fact, the commission seems hell bent on classifying every digital currency under securities laws, right from companies dealing in digital assets to cryptocurrency exchanges.

Operate Under Securities Laws or Face Exclusion

In a statement that went out to the press recently, the SEC noted that as long as a platform offers some form of digital asset trading while at the same time operating as an exchange, then they have no choice but to define them by federal securities laws. In that case, the commission says such a platform ought to register as a national securities exchange or risk being exempted from registration.

In the recent past, the SEC has been keen on scrutinizing the activities of online trading platforms that they suspect to be potentially harmful with regards to trading digital assets. As a result of this recent statement, it is clear that even more scrutiny should now be expected on firms that deal in digital assets. This is in contrast with the previous focus on cryptocoins and their developers only.

Jason Gottlieb, the leader of the cryptocurrency litigation team, had a few comments to make with regards to SEC’s move. He said:

I think it’s one more message from the SEC that they view coins as securities and they encourage everyone in the space to … follow securities laws,

Has the SEC Mentioned Bitcoin Specifically?

However, it should be noted that as much as the SEC has been at the throats of cryptocurrency firms, they are yet to name specific names. However, their move has greatly affected the prices of some digital coins like Bitcoin, which has dropped well below the $10,000 mark this week.

The current debate on what should constitute a security seems to stem from a ruling made by the Supreme Court way back in 1946. According to the ruling, as long as there is an investment of money towards a common enterprise whereby the investor hopes to reap rewards based on the effort of others, then this is a security.

 

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