At the center of the high-stakes case brought by the United States Securities and Exchange Commission is determining which crypto-assets are securities. While the agency has been hinting for some time that it considers most crypto-assets to be unregistered securities, this week’s charges up the ante considerably, much to the industry’s horror.
Bitcoin, for one, has been distanced from this context. Several altcoins, including Cardano (ADA), have been labeled as security by the SEC.
Subsequently, Input Output Global (IOG) – the developing firm behind the Cardano ecosystem – released a statement dismissing SEC’s claims that ADA is a security.
In a recently published blog post, IOG said the SEC’s filing is riddled with “numerous factual inaccuracies” while adding that ADA is not a security under United States securities laws and has never been.
The tech firm noted that the criticized commission’s approach of regulating the asset class through enforcement and added that such an action “does not provide either the clarity or certainty to which both the blockchain industry and consumers are entitled.”
IOG also highlighted that understanding how decentralized blockchains operate is a fundamental component in creating “responsible legislation.”
“Good regulation protects users and provides a sensible legal framework in which people can operate. IOG will always advocate for regulation that makes sense and honors the transparent and decentralized nature of blockchain.”
IOG further asserted that the SEC’s claim will not have any impact on its operations.
Besides Cardano, several crypto-assets have been specified as securities in the lawsuits against Binance and Coinbase.
These include Polygon (MATIC), Cosmos (ATOM), Solana (SOL), Algorand (ALGO), Binance Coin (BNB), Binance USD (BUSD), COTI, Chiliz (CHZ), Near (NEAR), Flow (FLOW), Internet Computer (ICP), Voyager Token (VGX), Dash (DASH), Nexo (NEXO), The Sandbox (SAND), Decentraland (MANA), Axie Infinity (AXS), among others.
The outcome of the SEC’s complaints is expected to take years to litigate. But if the agency is successful in classifying these tokens securities, US-based exchanges will be forced to delist them, which would severely restrict their trading. Such an eventuality will be a huge blow to the crypto ecosystem in the country.