In response to Gary Gensler’s allegations about crypto regulation, crypto attorneys said that the SEC has no regulatory authority.
In a recent interview, cryptocurrency attorneys rejected remarks made by the director of the United States securities regulator, saying that every cryptocurrency save Bitcoin is a security subject to its jurisdiction.
Gary Gensler, chairman of the Securities and Exchange Commission (SEC), said in a 23 February New York Magazine interview that “anything other than Bitcoin” fits within the agency’s jurisdiction.
He claimed other crypto ventures “are securities because there’s a group in the middle and the public is expecting earnings based on that group,” unlike Bitcoin.
Nevertheless, Blockchain Association lawyer and policy lead Jake Chervinsky stated on Twitter on February 26 that Gensler’s “opinion is not the law” despite Gensler’s claims of dominance in the cryptocurrency industry.
He continued, saying the SEC “lacks power to control any of them” until and until it “proves its case in court” for its jurisdiction over each token “one at a time.”
On February 26, attorney Logan Bolinger weighed in on the debate, tweeting “that Gensler’s judgements on what is or is not a security are not legally dispositive.”
“Judges, not SEC chairmen, ultimately decide the meaning and application of the law,” Bolinger noted. Jason Brett, the policy director at the Bitcoin Policy Institute, remarked that Gensler’s remarks “should not be praised, but feared” and that “there are ways to succeed without a regulatory moat.”
Meanwhile, investment company Delphi Labs’ general counsel Gabriel Shapiro tweeted a lengthy explanation of the almost impossible enforcement the SEC would have to take out on the sector to establish its regulation.
According to Gensler, over 12,300 tokens worth around $663 billion are unregistered securities that are prohibited in the United States. As Chervinsky indicated, the agency would have to initiate a case against each token inventor.
According to Shapiro, the SEC has taken chiefly one of two approaches to cryptocurrency: fining token issuers and mandating registration, or fining issuers and demanding the destruction and delisting of produced tokens from exchanges.
“SEC registration is not just prohibitively costly for the majority of token issuers, but there is no clear method for token registration,” Shapiro stated, adding:
“What is the objective here? As registration is not possible, the only alternative is for everyone to pay huge penalties, cease work on the protocols, destroy any development premines, and remove [tokens] from trade. It is equivalent to 12,305 lawsuits.” “What is the strategy? We are all perplexed, and billions of dollars are at stake.”
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.