SEC Designates 19 Tokens as Securities in Complaint Against Binance and Coinbase
The U.S. Securities and Exchange Commission (SEC) has designated 19 tokens as securities in its indictment against Binance and Coinbase. This could have huge implications for these tokens and the entire crypto industry.
The 19 tokens are:
Binance: ATOM, BNB, BUSD, COTI
Coinbase：CHZ、NEAR、FLOW、ICP、VGX、DASH、NEXO
Both: SOL, ADA, MATIC, FIL, SAND, MANA, ALGO, AXS
Interestingly, ETH was excluded.
What do these tokens have in common?
There is an initial sales/fundraising campaign.
Each project is committed to improving the protocol through ongoing development, including feature development and marketing.
Communicate the features and benefits of the protocol through social media.
The standard for determining whether a token is a security is the Howey test. The Howey test has four criteria for determining whether the target is an "investment contract" (security):
Money investment
In a common enterprise
Profitable expectations
From the efforts of others
The SEC stated that the above 19 tokens meet the requirements of the Howey test due to the three common factors mentioned earlier, thus generating "expectations of profit."
What would be the impact if they were considered securities?
The tokens will not be tradable on U.S. exchanges.
They may be delisted from US exchanges such as Coinbase and Robinhood.
It creates regulatory challenges and sets precedents.
The main issue here is that the Howey Test is an outdated, relatively limited framework that was created in 1946. Applying a framework established in 1946 to a completely new crypto asset class presents challenges.
In my view, the approach taken by the United States is reckless and short-sighted. I hope other countries take a different approach. We have seen more positive and thoughtful progress from other developed countries (e.g., the United Arab Emirates, the United Kingdom, Australia).
One thing is certain: we need clear regulation.
For the current development and future growth of the entire industry, we need clear guidelines on how cryptocurrencies can enter the financial system, which will come over time. But until then, buckle up for a bumpy ride.
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