SEC Chair Gensler Calls for More Regulatory Sunlight in Cryptocurrency Sector at Law Conference

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SEC Chair Gensler Cautions About Crypto Investing — Warns ‘Thousands’ of Crypto Tokens May Be Securities

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US Judge Backs SEC: Trading of Certain Cryptocurrencies on Secondary Markets Are Securities Transactions

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CoinGecko now has an index for crypto tokens alleged as securities

August 7, 2023 Coin Telegraph

Coin Telegraph

According to CoinGecko, nearly $85 billion worth of crypto falls under the category of “alleged SEC securities.”

CoinGecko launched a new index tracking the biggest crypto tokens viewed as likely securities by the United States Securities and Exchange Commission (SEC).

The ‘Top Alleged Securities Coins’ page sorts the selection of crypto assets by market capitalization, placing Binance Coin (BNB) at the top of the list — followed by Cardano (ADA), Solana (SOL) and TRON (TRX).

*The top 10 alleged securities tokens by market cap. Source: CoinGecko*

A CoinGecko spokesperson told Cointelegraph that the index was launched in the first week of August and was constructed by compiling a selection of the most notable tokens which had been deemed securities by the SEC in past lawsuits.

In its most recent lawsuits against crypto exchange giants Coinbase and Binance, the financial regulator brought the number of tokens it views as securities up a grand total of 68 — while CoinGecko only lists 24.

According to CoinGecko’s page, the top tokens included in the SEC’s litigated remit of the crypto space cover at least $84.9 billion of the entire market, approximately 7.5% of the $1.21 trillion total crypto market capitalization.

Total market capitalization of alleged securities tokens. Source: CoinGecko

Meanwhile, SEC Chair Gary Gensler has gone to great lengths to clarify that the overwhelming majority of crypto assets should be considered securities, having previously claimed that “everything other than Bitcoin” is a security, and thus falls under the agency’s remit.

If Gensler is correct, it would mean that almost every last one of the approximately 25,500 cryptocurrencies listed on crypto data platform CoinMarketCap would be regulated by the SEC.

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eToro halts ALGO, MANA, MATIC and DASH purchases for US customers

June 13, 2023 Coin Telegraph

Coin Telegraph

The firm said it remains a “supporter” of the crypto sector and suggested that the move was purely to avoid any potential regulatory non-compliance.

Retail trading platform eToro has halted purchases of Algorand (ALGO), Decentraland (MANA), Polygon (MATIC), and Dash (DASH) for customers in the United States in response to their labeling as securities in recent SEC lawsuits.

The move comes just a few days after competitor Robinhood also halted support for MATIC and two other SEC-deemed securities — Cardano (ADA), and Solana (SOL).

In a June 12 Twitter thread, eToro US noted that it had reviewed its crypto listings ”in light of the rapidly evolving regulatory landscape” and “recent developments” with the SEC.

eToro has a framework in place which reviews the cryptoassets we offer in light of the rapidly evolving regulatory landscape. Due to recent developments, we will be making some changes to our crypto offering for US customers. (1/5)
— eToro US (@eToroUS) June 12, 2023

The assets were officially delisted as of 6:00 am ET on July 12, however, eToro US users will still be able to hold and sell these assets.

“We remain a supporter of crypto assets and believe in the importance of offering our users access to a diversified range of asset classes, which includes stocks, ETFs, and options. We are committed to working closely with regulators around the world to shape the future of the crypto industry and champion access for the ordinary investor,“ the firm stated.

The firm has essentially opted to err on the side of caution, given that the SEC has now asserted in lawsuits against Binance and Coinbase that major assets such as ADA, SOL, MATIC, MANA, ALGO, and several others are securities.

Notably, eToro hasn’t mentioned anything about Solana or Cardano, which were also deemed as securities in the recent lawsuits.

interesting

eToro is removing Polygon and Algorand but not Solana pic.twitter.com/ZjigTmLmO0
— lightspeed mert | helius.dev (@0xMert_) June 12, 2023

This isn’t the first time eToro US has moved to halt access to certain assets in response to the litigation-friendly SEC. In December 2020, the firm also delisted Ripple (XRP) following the SEC’s lawsuit against Ripple Labs.

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Committee Advises SEC to ‘Aggressively Assert Authority’ Over Crypto — Says Virtually All Crypto Tokens Are Securities

April 11, 2023 Bitcoin.com

SEC accuses Utah firm of ‘fraudulent’ $18M crypto mining scheme

March 7, 2023 Coin Telegraph

<div>SEC accuses Utah firm of 'fraudulent' M crypto mining scheme</div>

bitcoin miner

The SEC said Green United’s operation was a fraud and the community was quick to quell fears of the SEC classing crypto mining as a security in the suit.

Software and crypto mining equipment offered by the Utah-based Green United LLC was part of an $18 million "fraudulent scheme" that never mined the crypto it said it would, according to allegations by the United States Securities and Exchange Commission (SEC).

The regulator filed a complaint in a Utah District Court on Mar. 3 against Green United, its founder, Wright Thurston, and a contracted promotor Kristoffer Krohn.

It alleges the company and the two representatives fraudulently offered securities between April 2018 and December 2022 by selling investments in $3,000 “Green Boxes” and “Green nodes” purported to mine the GREEN token on the “Green Blockchain.”

Investors were allegedly told the firm was to develop the Green Blockchain to create a “public global decentralized power grid” and the GREEN token would increase in value based on its efforts with returns of up to 50% a month.

However, the SEC claimed the hardware sold didn’t mine GREEN as it was an Ethereum-based ERC-20 token that could not be mined and the Green Blockchain didn’t exist.

It added the GREEN token was created “several months” after the first hardware sales to investors and was periodically distributed to “create the appearance of a successful mining operation.”

Instead the real scheme, according to the SEC, was using the funds to buy S9 Antminers — Bitcoin (BTC) mining rigs — which were passed off as the Green “boxes” and “nodes” to investors. The firm mined Bitcoin, not GREEN tokens, which the investors “did not receive.”

Is the SEC going after mining?

Meanwhile, the crypto community on Twitter has hosed down one interpretation of the SEC complaint, which suggests that the SEC is going after crypto miners arguing that selling miners or offering hosting for them is a securities investment contract.

The take came from a Mar. 6 tweet from pseudonymous lawyer “MetaLawMan.”

However, crypto advocate and investment advisor, Timothy Peterson, argued the interpretation was a “bad take” adding the case doesn’t “target mining in general.”

Somewhat of a bad take; the SEC's case does not target mining in general, but a specific ASIC that was supposed to mine an ERC-token but instead mined #bitcoin for the ASIC sellers. Alleged fraud. Agree the "investment contract" application to this case is a stretch. But the #SEC… https://t.co/KK5cVqFCAi
— Timothy Peterson, CFA CAIA (@nsquaredcrypto) March 6, 2023

“The SEC is not saying ‘all sales of mining equipment is now a security,’” Peterson clarified.

Another crypto commentator, Dennis Porter, CEO of the Bitcoin advocacy group the Satoshi Action Fund, tweeted that “the SEC is not coming after mining” and it “did not classify hosting as a security” and said Green United’s operation was “a scam disguised as mining.”

Please see official documents here explaining what was actually happening.

A scam disguised as mining. pic.twitter.com/1pUMk1M5NM
— Dennis Porter (@Dennis_Porter_) March 6, 2023

The SEC has asked for a court order to require Thurston, Krohn and Green United to cease operations, seeks civil penalties for securities law violations and repay the $18 million in allegedly ill-gotten gains.

Ripple Lawyer Argues SEC Chair Gensler Has Prejudged Crypto Asset Cases

March 1, 2023 Bitcoin.com

Germany’s DZ Bank to Offer Crypto Custody With Swiss Firm Metaco

February 25, 2023 Bitcoin.com

Ethereum co-founder Joe Lubin says no chance ETH is classed as security

February 10, 2023 Coin Telegraph

CFTC

The ConsenSys founder and Ethereum co-founder said it’s as unlikely as ride-sharing service Uber becoming illegal.

Ethereum co-founder and crypto entrepreneur Joseph Lubin is confident that Ether (ETH) won’t be classified as a security in the United States.

Cointelegraph spoke with Lubin, Ethereum co-founder and founder of blockchain tech firm ConsenSys, in Tel Aviv at the Web3 event, Building Blocks 23.

Asked if ETH could be classed as a security in the U.S. after Ethereum’s transition to a proof-of-stake (PoS) consensus model, Lubin said:

“I think it's as likely, and would have the same impact, as if Uber was made illegal.”

“There would be a tremendous outcry from not just the crypto community but different politicians and certain regulators,” he added.

In September, Securities and Exchange Commission Chairman Gary Gensler suggested that the blockchain’s transition to PoS might have brought ETH under the regulators’ beat.

Gensler believed staking coins gave “the investing public” anticipation of “profits based on the efforts of others.”

Lubin said he was privy to discussions with the SEC and the Commodity Futures Trading Commission “for many years.”

*Joseph Lubin speaking with Cointelegraph at Building Blocks 23 in Tel Aviv, Israel in February.*

He said around five years ago the regulators were “just trying to wrap their heads around what tokens were.”

“They thought back then that everything was a security. We — I think — helped them significantly understand lots of tokens are not securities, and then they went away and Gary and team now think almost everything's a security.”

Lubin, however, believes that ETH continues to be “sufficiently decentralized” and pointed to its “many use cases that don’t implicate it as a security.”

“There is no centralized set of promoters or builders that is specifically trying to raise the value of Ether and enrich investors,” he added.

“There's a court system in the United States of America that I think would be supportive of arguments that would be made that it is not.”

Lubin said that regulators appear to be more focused on another aspect of Ethereum at the moment, noting that people he knows close to the action in Washington D.C. say “most of the focus is on stablecoins right now.”

“Everybody's talking about it, freaking out. Calling for things to be done.”

In a Feb. 9 Twitter thread, Coinbase founder and CEO Brian Armstrong responded to “rumors” that the SEC was thinking to ban retail consumers from staking crypto.

“Staking is not a security,” he said, adding it would be a “terrible path for the U.S.” if a staking ban was passed noting it was “a really important innovation in crypto.”

“Hopefully we can work together to publish clear rules for the industry, and come up with sensible solutions that protect consumers while preserving innovation,” Armstrong said.

crypto securities