Comments on U.S. Virtual Currency Regulations
Ethereum (ETH) co-founder Vitalik Buterin responded on Twitter on June 30 when asked for his thoughts on US cryptocurrency regulation.
The one comment I’ll make is that I feel bad that @solana and other projects are getting hit in this way. They don’t deserve it, and if ethereum ends up “winning” through all other blockchains getting kicked off exchanges, that’s not an honorable way to win, and in the long term…
— vitalik.eth (@Vitalik Buterin) June 30, 2023
Buterin said he regrets that Solana (SOL) and other projects are currently suffering. Although no specific organization names have been given, it is clear that when the US Securities and Exchange Commission (SEC) sued Binance and Coinbase, it said that it considered multiple cryptocurrencies such as Solana to be securities. is. Buterin said the SEC’s ruling was not appropriate.
He argued that even if all other cryptocurrencies were delisted from exchanges and Ethereum “won”, it would not be an honorable way to win. In the long run, he commented, it’s not even a win. “The real competition is not other blockchains, but the still-expanding centralized world,” he said.
Buterin concluded by saying that he hopes all great projects will have a fair outcome.
connection: Binance and Coinbase SEC Lawsuits | Organize the Current State of Virtual Currency Regulations and Industry Reactions
Exchanges and projects also refute
In its lawsuit against Binance and Coinbase, the SEC cited multiple securities as examples of securities in addition to Solana, including Polygon (MATIC) and Ada (ADA).
After this lawsuit, Robinhood and Bakkt in the United States announced the delisting of Solana, Polygon, and Ada. Mr. Buterin describes such a situation.
In addition, Binance, Coinbase, and the projects listed as examples of securities disputed the SEC’s decision. Coinbase filed a response to the SEC lawsuit on the 29th.
In its response, Coinbase argued that the token, which the SEC considers to be a security, is not an investment contract and that the SEC is suing beyond its powers. It asked that the SEC motion be dismissed.
connection: “SEC’s lawsuit is an act of overreach” US Coinbase filed for dismissal of lawsuit
connection: Virtual currencies ADA and SAND criticize US SEC securities claims
Impact of securities certification
The SEC has been widely criticized for continuing to enforce regulations without clearly stating the reasons for judging them as securities. He consistently insists that The Howie test has a significant impact on the basis of the SEC’s decisions.
connection: Chairman Gensler Claims “SEC Has Already Provided Regulatory Guidelines”
Once a particular stock is considered a security, such as in accordance with the Howie Test, the exchange that handles that stock is subject to SEC supervision. Being under SEC supervision also has positive aspects, such as enhanced investor protection and improved service reliability.
On the other hand, for companies that provide virtual currency services, the burden of complying with regulations, such as pre-registration and information disclosure, has increased significantly. This will increase the costs and resources required to provide the service. If regulation increases transaction costs for investors, it could also make them less attractive as assets.
What is Howie Test
A test to determine whether a particular transaction in the United States constitutes a securities transaction under an investment contract. Derived from the SEC lawsuit against WJ Howie.
Although not legally binding, the SEC has filed lawsuits against cryptocurrency brands and services based on the Howie test. Specifically, it is a test to determine whether it is raising funds, whether it is a joint venture, whether it is expecting profits, and whether profits are due to the efforts of others. Some say that the Howie test is not suitable for the new asset called virtual currency.
connection: What is the Howey test that determines whether a virtual currency is a “securities”?
The post Ethereum co-founder Buterin responds to SEC securities allegations appeared first on Our Bitcoin News.