Mike Selig
@MikeSeligEsq
Followers
3,748
Following
824
Media
23
Statuses
611
partner at @WillkieFarr . crypto and finreg lawyer. prev @CFTC . tweets ≠ legal advice. not your lawyer. views are my own.🛡️
Manhattan, NY
Joined October 2017
Don't wanna be here?
Send us removal request.
Explore trending content on Musk Viewer
AU-1
• 392321 Tweets
#TopsxLolanexZeeNunew
• 112520 Tweets
#ユーフォ3期
• 103331 Tweets
VIVITE X LINGORM
• 87070 Tweets
#VivitexEveandBoyxLingOrm
• 85562 Tweets
えーちゃん
• 46792 Tweets
ML IN OSAKA
• 41983 Tweets
北九州記念
• 34633 Tweets
ラジオNIKKEI賞
• 33546 Tweets
差し入れ
• 27101 Tweets
アフター
• 17585 Tweets
#bbclaurak
• 17323 Tweets
夏越の大祓
• 14985 Tweets
全国金賞
• 10977 Tweets
オフトレイル
• 10299 Tweets
Continue to hear commentators saying Judge Torres held that XRP is a security when sold to institutions and not a security when sold to retail. This is incorrect. Judge Torres held that XRP itself is not a security, but it can be sold as part of a security. /1
28
191
801
SEC characterizes Kraken's custodial staking product as a security. Focus is on the fact that Kraken allegedly pooled customer crypto to provide superior and more consistent yield relative to non-custodial staking options. SEC view is not that staking in itself is a security.
44
121
664
Judge Rakoff’s decision on Terraform’s motion to dismiss in SEC v. Terraform Labs isn’t exactly the win the SEC wanted.
Judge Rakoff agreed with Judge Torres that crypto assets, in and of themselves, are not investment contracts. Bad for the SEC. /1
12
106
480
Significant setback for SEC w/ Judge Failla granting Coinbase’s motion to dismiss SEC’s claim that Coinbase acted as a broker by offering non-custodial digital wallet software. SEC aimed to discourage builders from developing peer-to-peer software. Didn’t work.
22
104
455
Don’t sleep on the SEC’s action against Do Kwon and TFL. The complaint includes a ton of novel legal theories that can be applied to stablecoins, wrapped tokens, liquidity pool tokens and other crypto assets. Steady lads… /1
41
98
367
SEC critique of Ripple for creating distinct standards for retail & institutional investors shouldn’t persuade any court. Howey’s a facts/circumstances test. Judge Torres distinguished transactions (not investor classes) bc facts (sales tactics, marketing, contracts) required it.
17
79
369
Banking regulators have essentially said banks can only issue stablecoins on private blockchains. PayPal will issue its stablecoin on Ethereum. This regulatory arbitrage has to put pressure on Congress to pass a stablecoin bill ASAP.
BREAKING: PayPal launches stablecoin on Ethereum, citing 'shift toward digital currencies'
155
745
3K
16
58
341
Seems unlikely SEC wants to regulate crypto exchanges, brokers and clearing agencies and more likely it wants to make it impossible for them to operate in the US. SEC is targeting the biggest US intermediaries - Coinbase, Kraken, Bittrex and Gemini. If they can’t comply, who can?
23
36
272
Massive win by the Ripple team against the SEC. Judge Torres clearly affirms the view that the same crypto asset may be sold as an investment contract (and therefore a security) and as a standalone good. The investment contract is the security, not the crypto asset. /1
9
46
280
SEC complaint against TFL and Do Kwon alleges that LUNA and UST are securities. In a novel theory, the SEC not only characterizes UST as an investment contract but as a security bc it could be exchanged for a security (LUNA). Under this theory, nearly anything can be a security.
46
34
268
SEC Chair doesn’t have the authority to determine which crypto assets are securities.
17
42
240
SEC’s purportedly seeking $2bil in monetary penalties from Ripple for purely technical registration requirement violations. The agency’s clearly no longer trying to hide its litigation motives. It’s regulation by insolvency.
As you will see when the SEC’s brief is made public tomorrow, they ask the Judge for $2B in fines and penalties. 1/4
370
810
3K
9
41
232
XRP itself is simply computer code. A fungible commodity, like gold or whiskey - both of which can also be sold as part of investment schemes that implicate securities laws. /2
4
19
205
SEC is incrementally building a body of legal theories to target crypto asset intermediaries. It’s not only focused exchanges. Beaxy complaint shows SEC is scrutinizing market making arrangements as broker-dealer activity and certain custody arrangements as clearing activity.
8
35
185
The 5th Circuit’s decision in CFTC v. PredictIt demonstrates that appellate courts are willing to shut down administrative agency overreach. The Court’s holding could impact the SEC’s crypto enforcement efforts. /1
2
37
176
These schemes implicate securities laws if sold to institutions or retail. The court’s job is to reason whether there is a contract, transaction or scheme where a person (institution or not) invests money in a common enterprise and expects profits based on the efforts of others.
2
14
159
After Ripple, seems SEC is worried it will lose more crypto cases and playing the numbers game. With its complaint against Kraken, we have 3 district courts that will evaluate the security status of crypto secondary sales (SDNY, DDC, NDCA). Supreme Court may decide it all.
10
20
157
It’s extremely common for crypto protocol foundations to receive voluntary requests for information from federal and state regulators. And subpoenas are about as sure as the sunrise for a crypto entity.
NEW: The
@ethereum
foundation is under investigation by an unnamed "state authority."
@realDannyNelson
,
@nikhileshde
and
@skesslr
reports
199
306
884
11
36
154
CB motion to dismiss advances a strong argument that “contract, transaction or scheme” under Howey means a contractual undertaking to deliver value at a later date (whether in a standalone contract or as a component of a transaction or scheme). Crypto assets aren’t contracts.
Today,
@coinbase
filed our brief asking the Court to dismiss the SEC’s case against us. Our core argument is simple — we do not offer "investment contracts" as that term has been construed by decades of Supreme Court and other binding precedent. 1/3
175
697
4K
9
24
155
SEC is setting the table for dinner guests it knows will never show. There is no path for a custodial crypto exchange to register let alone a liquidity pool operator.
🚨NEW: The
@SECGov
has adopted new rules for “dealers” and “government securities dealers”. The vote breakdown was 3-2 with Hester Peirce and Mark Uyeda dissenting and
@GaryGensler
being the deciding vote.
More to come on what this may mean for
#crypto
.
Full release:
61
119
478
11
32
153
There must be sufficient facts on the record to prove a contract, transaction or scheme that satisfies each of the elements of this test (known as the Howey test) to implicate securities laws. Judge Torres determined that there were not with regard to certain sales of XRP. /4
1
9
145
It is hard to say how Judge Torres could have misapplied the law. It is well established that an investment contract is a transaction, contract or scheme. There is no legal precedent supporting the view that a commodity can somehow embody a security. /5
1
10
143
SEC settled its first enforcement action involving PFP NFTs. SEC alleges each uniquely generated “Stoner Cat” itself to be a “crypto asset security in the form of a non-fungible token.” Mechanics of the offering were similar to most popular PFP projects. Some of my takeaways… /1
20
45
141
LBRY decision isn’t super significant bc crypto projects have largely moved away from relying on the “utility token” model to defeat Howey. That said, a few things to note… /1
11
20
140
SEC has effectively conceded ETH isn’t a security multiple times, but left ambiguity. Prometheum need only reasonably believe ETH is a “crypto asset security” to custody it. SEC permitting Prometheum to custody ETH as a security bc of this ambiguity won’t make ETH a security.
Crypto firm Prometheum says Ethereum's ETH will be the first digital asset it holds for customers. That custodial start for the controversial firm could also test federal regulators' views about ETH as a security.
@jesseahamilton
reports
33
28
100
19
24
140
SEC Chair Gensler says every crypto asset other than bitcoin is a security. SEC FinHub Head said today at the
@CFTC
MRAC meeting that “most” crypto assets are “offered and sold as” securities. Small difference in terminology but huge difference in regulatory implications.
11
22
134
SEC’s failed to convince any court that tokens themselves are securities and so it pivoted to tokens plus ecosystems are securities that must somehow be registered. This is like saying gasoline isn’t a security but must be registered as one bc people make products that run on it.
I attended a talk last night with recently departed SEC crypto litigation leader Ladan Stewart, where she debated with
@RebeccaRettig1
and
@NYcryptolawyer
over her agency's controversial approach.
In one notable exchange, Stewart said the SEC does not view tokens as securities,
40
72
378
13
27
140
Judge Torres exposed a massive regulatory gap with regard to crypto assets. This is because most transactions involving crypto assets are not likely to implicate securities laws. But legislation would be needed to fix this. /7
2
11
131
Other courts have similarly reasoned that crypto assets are not contracts, transactions or schemes and therefore cannot be investment contracts. Judge Torres refused to legislate from the bench that crypto assets can be deemed to embody an investment contract. /6
1
10
130
The facts are so bad in Terraform that it’s hard to say how Judge Rakoff’s decision helps the SEC. The decision is a compilation of all the things lawyers tell crypto clients not to do. Nice to have it all in one place for ease of reference. But some important takeaways… /1
7
21
129
SEC prefers the narrative of crypto assets being securities when sold to certain investors bc it smooths over the regulatory hole that results from the investment, contract or scheme being the security rather than the token. But no SEC jurisdiction without legislation. /9
9
12
126
Legislation can expand the authority of an agency, such as the SEC or CFTC, to promulgate new regulations for crypto assets. /8
3
10
122
SEC’s use of “crypto asset security” is a misnomer bc the asset isn’t the security. If recent decisions stand then crypto assets generally aren’t securities (but can be sold as part of securities). This term appropriately describes tokenized stocks and bonds, but not most assets.
10
11
121
The ripple effect of the Grayscale decision is massive. SEC would have faced similar legal challenges for denying ETH futures ETFs. By approving an ETH futures ETF, the SEC effectively concedes ETH is not a security. This will no doubt impact the Coinbase and Binance litigation.
5
20
121
Grayscale’s lawsuit against the SEC is the gift that keeps on giving. The SEC has no better argument to deny an ETH ETF than it had to deny a BTC ETF. Likely to see another begrudging SEC approval or SEC loss in court for an arbitrary and capricious denial this year.
You gotta give this boomer his credit. He stepped into crypto in June 2023 and said hold my beer. Completely dominated the narrative for 7 months. Now he’s about to run it exactly back with ETH. Impressive.
BLACKROCK CEO FINK SAYS SEE VALUE IN HAVING AN ETHEREUM ETF - RTRS
24
25
265
16
20
115
The SEC, CFTC, FinCEN, OFAC, NY Dep’t of Financial Services and now the IRS have all tried to regulate crypto out of existence. The US is going to run out of regulators to throw at crypto pretty soon.
7
8
109
Security status doesn’t change with political administration. ETH is a seasoned non-security at this stage. Hard to believe this could withstand judicial scrutiny.
Reports indicate
@GaryGensler
is moving to unilaterally classify
#ETH
as a security.
This is contrary to the
@CFTC
's assessment and the
@SECgov
's prior actions.
Congress decides the SEC's jurisdiction and budget, Chair Gensler doesn't get to make it up as he goes along.
496
630
3K
13
13
114
Even if the SEC were to win these issues on appeal, Judge Torres could determine that Ripple’s “programmatic sales” and “other distributions” aren’t investment contracts for other reasons. Judge Torres didn’t address all prongs of the Howey test w/r/t these sales in her opinion.
9
20
113
SEC rejects Coinbase’s petition for rulemaking. Tl;dr, SEC says there’s a clear-ish circa 1946 test for identifying crypto securities and it has acted to bring crypto within its regulatory perimeter by clarifying that legacy laws apply and suing everybody that doesn’t comply.
12
11
110
SEC end game is no doubt to force the developers of open-source peer-to-peer software protocols to register as national securities exchanges and broker-dealers. An impossible task. This will only serve to drive defi offshore.
JUST IN: The
@SECgov
is looking to capture DeFi and other crypto entities in an amended proposal expanding how it oversees "exchanges."
@nikhileshde
@jesseahamilton
report
76
84
252
5
18
106
SEC lawsuit against Coinbase is as expected. SEC argues CB operates an unregistered exchange, broker & clearing agency. It asserts that certain tokens and staking programs offered by CB are securities. Complaint covers CB platform, prime brokerage, and unhosted wallet. /1
6
24
101
But Judge Rakoff explained that the facts in this case don’t call for such a distinction bc defendants promoted to all purchasers that they’d maximize profits for holders that used tokens in defendants’ protocols and most holders deposited into the protocols. Bad for the SEC. /3
2
5
102
SEC theory that all transactions in a token are securities bc the token embodies the value of a security is unusual. Commodities sold in a securities transaction aren’t carriers that transmit the security status of the transaction on to future transactions under different facts.
SEC’s response to CB’s motion for judgment on the pleadings argues that crypto assets have “no innate or inherent value” but “embody some underlying value” of an investment contract. It follows that an asset may at some point no longer embody this value… And we’re back to 2018.
5
1
26
15
13
99
A non-US bank just launched a Euro stablecoin on the Ethereum blockchain. Nonbank PayPal opted to launch PYUSD on Ethereum as well. Yet US banking regulators have made it impossible for US banks to issue stablecoins on permissionless chains. This policy won’t last very long.
.
@SocieteGenerale
's euro stablecoin EUR Coinvertible (EURCV) has started trading on European cryptocurrency exchange
@Bitstamp
. By
@JamieCrawleyCD
24
53
163
7
21
93
So the district court reasoned that Tornado Cash, which is open, permissionless software that operates on a decentralized blockchain network, is property because it’s kind of like a vending machine…? Crypto lawyers have a lot of educating to do.
Rights are rarely secured on a path that is always ⬆️ and ➡️. We continue to believe Plaintiffs' challenge to OFAC's Tornado Cash action is right. We’ve always known that Fifth Circuit review is required to resolve these issues, and we continue to support them on appeal. 1/4
12
69
288
5
25
95
A Wells Notice from the SEC is now routine paperwork if you’re in crypto.
4
9
93
Judge Torres holding that there's no investment of money w/r/t employee grants of XRP squares w/ SEC guidance. SEC doesn't view grants to broad groups of employees via bonus plans as “sales” bc employees don’t individually bargain to contribute tangible/definable consideration.
9
12
92
Chair Gensler says “the vast majority of crypto tokens…meet the investment contract test.” Frmr Chair Clayton said “every ICO I’ve seen is a security.” Similar rhetoric but different meaning. Unlike Clayton, Gensler says tokens themselves are securities. Judge Torres disagreed.
🚨NEW: Ahead of tomorrow’s
@BankingGOP
hearing,
@GaryGensler
released the testimony he will give to the committee. Here’s what he will have to say about crypto tomorrow 👇
7
11
51
11
14
89
If you read all of the judicial decisions relating to sales of crypto assets (Telegram, Balestra, Kik, LBRY, Ripple, Terraform) together, it is hard to find any support for the view that very many secondary sales of crypto assets implicate securities laws. /1
6
12
90
This shows why legislation is needed for clarity. Judge Torres held that crypto assets aren’t contracts, transactions or schemes and therefore aren’t investment contracts. But Judge Rakoff says crypto assets can represent investment contracts. Both are SDNY judges. /6
5
3
87
This is consistent w/ the Gary Plastic case, which former SEC Director Hinman used to support his view that ETH isn’t a security. Under this reasoning, it’s possible for a security to become a non-security bc of changed circumstances (e.g., decentralization). Bad for the SEC. /5
3
5
86
Then Judge Rakoff said a crypto asset combined with the means by which it is offered and sold can comprise an investment contract. And Judge Rakoff chose not to distinguish between primary and secondary sales of these products in his analysis. Helpful to the SEC. /2
2
3
79
When asked if anybody has managed to offer a crypto asset security in compliance with the federal securities laws and can serve as a model for others, SEC Chair Gensler said "there are a number that have." Yet he could not name a single one of these exemplary tokens.
11
4
78
If a spot BTC ETF is on the horizon, a spot ETH ETF can’t be far behind. With the Hinman speech, the SEC FinHub framework, and judicial decisions in Ripple and Terraform, the case grows stronger each day that ETH is not a security, even if it was initially sold as one.
BREAKING:
Six entities have rushed to file applications with the US SEC for Ethereum (ETH) ETF
175
527
3K
39
15
76
SEC Chair gets to set the rulemaking agenda for the SEC. Chair Gensler says the SEC will prioritize rules for AI over rules for crypto. But the SEC certainly hasn’t prioritized enforcement actions related to AI over crypto. Why the discrepancy?
BREAKING:
SEC chair Gary Gensler has stated that he intends to prioritize regulations regarding artificial intelligence over those for cryptocurrencies.
497
291
2K
18
14
77
Judge Rakoff reasoned that a non-security crypto asset may “become an investment contract” security due to a change in circumstances. He focused on the way that each crypto asset was marketed and interacted with defendants’ protocols. /4
1
4
78
Crypto projects have just one viable way to proactively seek regulatory clarity from the SEC today: sue it.
Today, Consensys filed a lawsuit against the Securities and Exchange Commission.
The goal behind this is to ensure that Ethereum remains a vibrant and indispensable blockchain platform and to preserve access for the countless developers, market participants, and institutions
541
2K
6K
4
8
81
@JohnEDeaton1
@CGasparino
@JohnReedStark
Judge Torres applied the Howey test to the facts on the record, no differently from how it’s been applied in countless cases (and citing typical precedent). Many lawyers saying Judge Torres “got it wrong” simply don’t like the outcome. Only legislation will solve that grievance.
1
3
74
SEC doesn’t decide to sue a crypto company based on the extent of its failure to comply with law but rather the extent of the chilling effect the lawsuit will have on the industry. In the short term, it’s not enough to be right on the law. In the long term, the SEC will lose.
Entrepreneurs in the US will get a $2-$3m quote from a top tier law firm, and 0 guarantee of success. For a blessed startup that’s already over 50% of their runway. wtf would any founder stay in the US?
3
37
288
2
11
75
Sue or be sued. Crypto businesses pulling Genslers on the SEC now.
So this is huge. Today,
@LEJILEX
and the Crypto Freedom Alliance of Texas (CFAT) sued the SEC seeking a declaration that “secondary-market sales of digital assets like the ones that LEJILEX intends to facilitate through the are not sales of securities.”
21
74
331
2
6
74
Chair Gensler says the crypto industry is built upon noncompliance w/ law. But most crypto teams attempt to comply w/ applicable law. The law’s just not clear. Crypto is a new tech w/ unique features and can’t function as designed w/in the current securities law framework.
3
6
70
Hinman emails make it challenging for SEC to deem ETH a security. SEC’s Office of General Counsel and senior staff reviewed his statement that ETH isn’t a security and didn’t require him to strike it, acknowledging it would be difficult for SEC to later take a contrary position.
Next extract. But the OGC has concerns. It may impact on what the SEC says about Ethereum in the future. No problem with those concerns. Hinman spoke to Buterin and understands how Ether works. The Ether discussion stays in the speech. We no why. /8
24
88
514
13
12
64
It would be a total loser for the SEC to attempt to classify ETH as a security. Ethereum derives its value not from any identifiable team but rather a widely dispersed ecosystem of builders, users, apps, wallets, tokens, protocols, bridges, DAOs, rollups… and soon ETFs.
Many traditional finance market participants may not fully understand that
#ETH
is not just a speculative asset but has extensive real-world utility underpinning a vibrant decentralized application ecosystem. Ethereum supports over 270 million unique user addresses and processes
8
27
119
3
12
65
We now have regulation by comment with the SEC deeming Filecoin to be a security through a comment to Grayscale’s trust product application without providing any supporting legal analysis.
JUST IN: Grayscale Investments revealed Wednesday that the U.S. Securities and Exchange Commission thinks the Filecoin token $FIL might be a security.
@nikhileshde
reports
92
126
433
8
12
61
The SEC isn’t just classifying crypto assets as investment contracts or notes anymore. The SEC alleges wrapped tokens to be securities because they are a “receipt for a security” and a stablecoin to be a security because it is a “right to subscribe or purchase a security.” /2
6
3
58
You know you’re in a bear when you pay for coffee at Consensus.
10
8
58
US regulators slam the door on regulated political prediction markets. So we get Jeo Boden and Doland Tremp memecoins. Markets always find a way.
10
9
59
Bittrex filing for Chapter 11 bankruptcy less than a month after the SEC filed a complaint against it is no coincidence. SEC investigations are extremely expensive to defend and the agency knows this. Without winning a single legal argument, the SEC can win by draining the bank.
6
11
54
More confirmation from SEC that ETH won’t be regulated as a security. We’ve yet to see any of the legal reasoning supporting SEC’s recent decisions on ETH but it’s clear the days of “everything but BTC is a security” are over. The door to non-security crypto asset status is open.
ETHEREUM SURVIVES THE SEC.
Today we’re happy to announce a major win for Ethereum developers, technology providers, and industry participants: the Enforcement Division of the SEC has notified us that it is closing its investigation into Ethereum 2.0.
This means that the SEC
1K
5K
18K
3
12
63
SEC Chair Gensler said the crypto industry is “rife with noncompliance.” Yet, in the absence of a clear regulatory framework,
@TeamPOSA
and its members have elected to self-regulate based on Staking Industry Principles. Fantastic effort by
@evweiss1
,
@AMangiero
and
@TeamPOSA
.
Today we are proud to announce our updated Staking Industry Principles & call on all builders, founders, & technologists in the staking space to align with them to enhance consumer protection, foster responsible innovation, & support the sustainable growth of PoS networks.
👇🧵
2
34
101
0
11
57
US Senators, Representatives, presidential candidates, ex-SEC Commissioners, legal scholars and now eight state attorneys general all dispute the SEC’s claim of authority over crypto assets. But SEC Chair Gensler says the law is clear…
Eight state AGs in US challenge SEC's authority in Kraken lawsuit with joint amicus brief
23
19
84
5
14
55
Many excellent amicus briefs in support of Coinbase’s motion to dismiss. The fact that that there’s any debate that the term “investment contract” requires a contract is mind boggling. As is the SEC’s view that a crypto exchange must register as a national securities exchange.
I can't say enough how gratifying it is to get support from so many amici today. Thank you. I appreciate the effort behind these briefs, and can't wait to read every word. I know they will prove useful to the Court in understanding the legal errors of the SEC's ways. Links below.
69
152
1K
1
5
51
The SEC has not formally withdrawn any of these letters but Chair Gensler and the SEC have characterized nearly all crypto assets as securities. It may be argued that the SEC has effectively taken final agency action w/o a reasoned explanation. /7
0
5
49
Hopefully bad facts and unsympathetic defendants don’t make bad law here. /6
Gensler's next strategy is to go after Do Kwon and UST because he knows no one will defend them and if he wins he'll establish broad precedent for more control over crypto.
It's evil genius.
59
52
327
3
2
46
The SEC reasons that a token w/o native yield is an investment contract bc purchasers expected profits based on the ability to deposit it into a yield protocol supported and marketed by the issuer. This may be leveraged against L1/L2 grants and defi liquidity programs. /5
And it doesn't stop there...UST apparently is also a security because you could use it to generate returns on yet another protocol (Anchor).
Sounds a lot like...uh...depositing fiat in a bank.
What non-security currency on the planet does NOT behave like this?
Wild.
8
14
79
5
5
46
“Let us be honest about what we are doing here: banning technologies we do not like.” SEC Commissioner
@HesterPeirce
doesn’t mince her words on the SEC’s purported “technology neutral” approach to regulation.
The SEC exhibits hostility toward technology and disclosure in a new rule proposal: Here's my initial take: and
158
285
969
0
11
45
ETH has a broadly decentralized value proposition. Millions of apps, developers, and tokens on Ethereum. NYAG’s arg that ETH is a security bc holders expect profits from the efforts of Ethereum devs and founders to promote ETH for investment and transition to PoS is nonsensical.
Crypto assets are network assets. Unlike firms, networks are generative. Value derives from the apps, organizations and projects built on the network. Once a network is sufficiently decentralized, its value isn't dependent on any central actor and securities laws shouldn't apply.
5
5
29
3
6
36
“…the SEC has met inquiries about blockchain technology with a stubborn and decidedly uncreative insistence that existing rules work just fine. We have not worked seriously with people in the industry to figure out how to achieve our regulatory objectives…” 🎯
We at the SEC need to do our part to ensure that the US is a "Why not?" kind of place where people are free to pursue their dreams:
463
181
1K
0
6
44
First they came for the ICOs, and I didn’t speak out bc I was a retroactive airdrop…
Then they came for the airdrops, and I didn’t speak out bc I blocked US IPs…
Then they came for the VPNs…
4
4
44
PredictIt had a CFTC no-action letter (NAL) that permitted it to operate a prediction market w/o registering w/ the CFTC as a futures exchange. It sued the CFTC after the CFTC withdrew the NAL w/o explaining the reasoning for its decision. /2
1
2
40
The holding establishes a higher standard for rescission of an NAL. The CFTC and SEC will likely be significantly less willing to issue NALs if the Court’s ruling stands. /4
1
2
41
The SEC’s receipt theory can be leveraged to indirectly target crypto assets such as ETH by bringing an action against the issuer of a corresponding wrapper and arguing the wrapped asset is a security so therefore the wrapper is a receipt for a security. /3
8
5
39
An SEC subpoena is as much a guarantee as the sunrise for a crypto business today.
3
3
42
The SEC theory that a stablecoin that’s convertible to a security is a “right to purchase or subscribe to” a security can be used against almost any crypto asset. FinCEN uses this reasoning to regulate all crypto assets as monetary value bc they’re convertible to money. /4
SEC complaint against TFL and Do Kwon alleges that LUNA and UST are securities. In a novel theory, the SEC not only characterizes UST as an investment contract but as a security bc it could be exchanged for a security (LUNA). Under this theory, nearly anything can be a security.
46
34
268
6
6
38
The Court held that an NAL is a license and withdrawal of an NAL is a final agency action subject to judicial review. The Court reasoned that the CFTC’s action was likely arbitrary and capricious bc it rescinded the license without explaining why. /3
1
3
40
SEC settlement w/
@Quantstamp
shows why new rules are needed for crypto. Quantstamp didn't satisfy some technical req's of registration exemptions it used to offer tokens. But SEC implies that it needed to impose transfer restrictions via smart contract. This isn't in the rules.
8
4
39
The SEC has issued 3 NALs involving crypto assets (TurnKey Jet, PocketfulOfQuarters, IMVU) under prior leadership, confirming it doesn’t view offers and sales of such crypto assets to be securities. /5
1
2
37
Although only the beneficiary of an NAL may rely upon it, similarly situated third parties commonly rely upon NALs. Yet it’s unclear whether the current SEC stands by the conclusions in its prior crypto asset related NALs. /6
1
3
36
Must read article by giga brain
@evweiss1
on why most crypto staking arrangements don’t implicate securities laws. Hard to argue w/ the facts. Stakers expect profits, if at all, from blockchains, not staking providers. Staking services are technical support, not asset management.
I’ve heard a lot of talk recently about the pooling of tokens for staking and whether that alone makes them a security.
I want to share my thoughts on why liquid staking as a document of title is the best representation of the staker-service provider relationship 🧵
1
36
133
2
5
37
Crypto probably has a higher barrier to entry than any other industry in America. Regulators are the moats of the US crypto economy. But the nice thing about judicial victories against regulators is they’re legal precedents that all can rely upon to move the industry forward.
@Sonnenshein
@Grayscale
Congrats!
Strange world we live in where winning against this SEC in court is seen as a rite of passage in our industry.
50
82
1K
0
4
35
SEC alleges Bittrex operated an unregistered national securities exchange, broker, and clearing agency. Yet it would be impossible for Bittrex to register and comply. SEC is building up as many legal theories as it can to target crypto intermediaries and force them offshore.
1
7
33
Public notice and comment can provide cover for controversial regulatory agency decisions. Regulators like being able to point to overwhelming public pressure to approve or disapprove a matter as justification for an agency decision.
The
@SECGov
is inviting public comments on spot ether ETF proposals -- specifically from
@Grayscale
,
@Fidelity
and
@BitwiseInvest
-- though crypto observers aren't counting on ETH getting a repeat of the bitcoin ETF approvals.
@jesseahamilton
reports
44
41
171
8
5
37
The fact that there's an alleged SEC investigation into one stablecoin doesn't mean that the SEC regards ALL stablecoins to be securities. The conclusion that any crypto asset should be deemed a security depends on the unique facts and circumstances of the offering.
7
8
38
Great to host students in the Oregon Blockchain Group (
@oregonblock
) at
@WillkieFarr
’s offices today to talk crypto law and regulation. The future of crypto is bright.
4
10
36