Cryptocurrency Lawyers Criticize Gensler Over Claims All Cryptocurrencies Are Securities

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Cryptocurrency lawyers have rejected comments made by the head of the United States securities regulator, stating in a recent interview that all cryptocurrencies except Bitcoin (BTC) are securities that fall under his jurisdiction.

In a wide-ranging Feb. 23 New York Magazine interview on crypto, Securities and Exchange Commission (SEC) Chairman Gary Gensler claimed that “everything other than Bitcoin” falls under the agency’s mandate. .

He added that other crypto projects “are values ​​because there is a pool in the middle and the public anticipates gains based on that pool,” which he said is not the case for Bitcoin.

However, Jake Chervinsky, an attorney and policy leader at the Blockchain Association, a cryptocurrency advocacy group, argued in a February 26 tweet that Gensler’s “opinion is not the law” despite his alleged dominance over the cryptocurrency industry.

He added “until and unless” the SEC “proves its case in court” for its jurisdiction over each individual token “one at a time”, then it “lacks the authority to regulate any of them.”

Attorney Logan Bolinger also weighed in, tweeting on Feb. 26 “that Gensler’s views on what is or is not a security are not legally dispositive,” meaning it is not the final legal determination.

“Judges, not SEC chairmen, ultimately determine what the law means and how it is applied,” Bolinger added.

Policy lead at the advocacy body Bitcoin Policy Institute, Jason Brett, said Gensler’s comments “should not be celebrated, but feared” and stated that “there are ways to win other than through a regulatory moat.”

SEC needs 12,305 lawsuits: Delphi Labs lawyer

Meanwhile, Gabriel Shapiro, the general counsel of investment firm Delphi Labs, outlined in a series of tweets the seemingly impossible application the SEC would have to make 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 US and, as Chervinsky mentioned, the agency would have to file a lawsuit against each creator. of tokens.

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The SEC had handled cryptocurrency in two main ways, according to Shapiro: either by fining token creators and requiring the issuer to register, or by fining and ordering the created tokens to be destroyed and removed from exchanges.

“Not only is SEC registration too expensive for most token creators, but there is also no clear path to token registration,” Shapiro said, adding:

“What is the plan here? Since registration is not feasible, it can only be (that) everyone pays huge fines, stops working on protocols, destroys all development premins, and removes listings (tokens) from trading. That would mean 12,305 lawsuits.”

“What’s the plan? We’re all wondering, and billions of US (dollars) are at risk.”