Crypto lawyers blame Gensler on claims that all crypto is securities

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Cryptocurrency lawyers dismissed comments from the head of the US securities regulator, saying in a recent interview that every cryptocurrency except Bitcoin (BTC) is a security that falls under of his competence.

In an extensive Feb. 23 New York Magazine interview on crypto, Securities and Exchange Commission (SEC) Chairman Gary Gensler asserted that anything other than Bitcoin is within the purview of the agencies.

He added that other crypto projects are securities because there is a band in the middle and the public anticipates profits based on that band, which he says is not the case with Bitcoin.

Gensler in @NYMag on crypto:

-everything is security except bitcoin-all companies are in violation-crypto is useless but blockchain is pretty neat

It’s hard to claim you’re acting in good faith if you’re certainly trying to eradicate an entire industry. pic.twitter.com/Ozw8ZJ3ETO

— Alexander Grieve (@AlexanderGrieve) February 26, 2023

Jake Chervinsky, a lawyer and policy officer at the Blockchain Association, a crypto advocacy group, however, argued in a Feb. 26 tweet that Gensler’s opinion was not the law despite his alleged mastery of the crypto industry. cryptography.

Chairman Gensler may have prejudged that every digital asset outside of bitcoin is a security, but his opinion is not the law. The SEC has no authority to regulate any of them until it proves its case in court. For each asset, each, individually, one at a time.

— Jake Chervinsky (@jchervinsky) February 26, 2023

He added up to and unless the SEC proves its case in court for its jurisdiction over each individual token one at a time, it does not have the authority to regulate any of them.

Attorney Logan Bolinger also weighed in on the matter, tweeting on Feb. 26 that Gensler’s views on what is or isn’t a security aren’t legally determinative, meaning it’s not the legal decision. final.

Friendly reminder that Gensler’s opinions on what is or is not a security are not legally binding.

In this country, judges — not SEC chairmen — ultimately determine what the law means and how it applies.

That’s not to say his thoughts aren’t relevant. They are simply not decisive.

— Logan Bolinger (@TheWhyOfFI) February 26, 2023

Judges, not SEC chairmen, ultimately determine what the law means and how it applies, Bolinger added.

Advocacy body Bitcoin Policy Institute policy officer Jason Brett said Gensler’s comments should not be celebrated, but feared and said there are ways to win other than through a regulatory moat.

Gary Gensler’s story is not bueno. There are other ways to win than via a regulatory gap. And every time it is, the script can be reversed and before you know it, everyone is crying due process. Gensler’s comments in NY Magazine should not be celebrated, but feared.

— Jason Brett (@RegulatoryJason) February 26, 2023 SEC needs 12,305 lawsuits: Delphi Labs attorney

Meanwhile, Gabriel Shapiro, general counsel at investment firm Delphi Labs, described in a series of tweets the seemingly impossible enforcement the SEC would have to apply to the industry to cement its rule.

Shapiro analyzed that more than 12,300 tokens worth around $663 billion are, according to Gensler, unregistered securities that are illegal in the United States and, as Chervinsky mentioned, the agency should sue legal action against each token creator.

Related: Emojis count as financial advice and have legal consequences, judge the rules

According to Shapiro, the SEC had dealt with crypto in two main ways: either by fining token creators and forcing the issuer to register, or by fining them and ordering that the created tokens be destroyed and withdrawn from stock exchanges.

So far, SEC has managed tokens mainly in 2 ways:

(1) fine + registration requirement – this has failed every time so far with companies going bankrupt

(2) fine + order to destroy all premined tokens and remove tokens from all exchanges

both ways tokens go to $0

— _gabrielShapir0 (@lex_node) February 26, 2023

SEC registration is not only too expensive for most token creators, there is also no clear path for token registration, Shapiro said, adding:

What’s the plan here? Since registration is not possible, it cannot be [that] everyone pays huge fines, stops working on protocols, destroys all development premines and delists [tokens] Trade. That would mean 12,305 trials.

What is the plan? We all wonder, and billions of Americans [dollars] Are at risk.

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