Cryptocurrency traders have been put on notice that the US Securities and Exchange Commission considers a range of widely traded digital assets to be securities, a position that could impose regulatory requirements that many boosters say could be crippling. But figuring out what does or doesn’t make a coin a security is a complicated question. For example, a federal judge ruled in July that one particular token, XRP, was a security when it was sold directly to institutional investors, but wasn’t when sold to the general public on exchanges.
Chair Gary Gensler, who long argued that many digital assets have the hallmarks of securities, continues to take an increasingly hard line. On June 6, the agency sued Coinbase Global Inc., the biggest US crypto trading platform, alleging that it illegally listed numerous tokens. In a separate case announced the day before, the SEC alleged that Binance Holdings Ltd. also listed unregistered securities. In those two lawsuits, the SEC designated 19 digital tokens trading on the platforms as securities — a move that was perceived by investors as so potentially damaging that it caused a sharp selloff. The coins’ combined market value slumped by about $23 billion in the week after the first lawsuit was filed.
Credit: Source link