As a seasoned researcher who has witnessed the evolution of the crypto industry over the past decade, I find myself deeply intrigued by this ongoing legal battle between Beba and the SEC. Having closely followed the regulatory landscape of digital assets, it is evident that the SEC’s stance on token airdrops, particularly their interpretation of the Howey Test, seems to be at odds with the reality of the crypto world.
Notably, significant cryptocurrency advocacy groups like the Blockchain Association and the Crypto Council for Innovation have rallied behind a recent legal controversy involving token airdrops.
These Washington-based advocacy organizations have submitted a supporting document, known as a friend-of-the-court brief, to back up apparel company Beba in their legal dispute with the U.S. Securities and Exchange Commission (SEC).
Details Of The Ongoing Legal Battle Against The SEC
The case was submitted in March, aiming for the Securities and Exchange Commission (SEC) to provide clear guidance on whether token airdrops comply with U.S. securities regulations.
Beba and the DeFi Education Fund claim that airdrops do not fit within the criteria defined by the “Howey Test,” which is used to identify whether a transaction is considered an investment contract under the law.
According to their argument, these airdrops don’t involve spending money upfront because tokens are usually given away for free, with no expectation of earning a profit.
In their submission, the legal teams representing both the Blockchain Association and the Crypto Council contend that the Securities and Exchange Commission (SEC) regulating token airdrops exceeds the agency’s jurisdictional limits.
1/ Today, the Blockchain Association and Crypto Council have submitted an amicus brief in the case of Fund for Defi vs. SEC and Beba Collection. Is an airdrop considered an investment of money even if it’s free? The SEC argues yes; the plaintiffs argue no. However, we believe that the plaintiffs are correct in their argument. Here’s why:
— Marisa Tashman Coppel (@MTCoppel) October 28, 2024
Seeking Clarity on Crypto Token Airdrops
The topic of token airdrops has become a significant point of debate within the digital currency sector. SEC Chair, Gary Gensler, has made it clear that they are planning to enforce regulations on most digital assets using current securities laws.
Critics argue that the Securities and Exchange Commission’s methods have encountered strong opposition, as some cryptocurrency companies claim the agency’s actions are in violation of the Administrative Procedures Act (APA), a set of guidelines detailing how federal agencies should establish and implement regulations.
As reported by Beba, entities such as Coinbase, Binance, and others argue that the Securities and Exchange Commission’s (SEC) approach to enforcement is not adequately supported by existing legislation.
In a legal submission, the Blockchain Association and the Crypto Council contend that the Securities and Exchange Commission’s application of the Howey Test overlooks significant differences between conventional financial products and digital currencies.
Instead of directly investing money, they highlight that airdrops do not require it, thereby suggesting that traditional securities laws may not apply to these situations.
Marisa Tashman Coppel, who leads the legal team at the Blockchain Association, highlighted that the concept of “shared enterprise” presents an additional hurdle for the SEC’s strategy, since parties involved in airdrop transactions, whether they are recipients or issuers, frequently don’t have a joint business objective.
The U.S. Securities and Exchange Commission (SEC) has chosen to discard the legal action, arguing that they possess the power to oversee cryptocurrency assets as if they were securities.
This motion comes as the agency continues to pursue regulatory action against high-profile digital asset firms, creating a climate of regulatory uncertainty that has led several companies to reconsider their operations in the country.
The Blockchain Association and Crypto Council are asking the court not to grant the SEC’s request to dismiss their case, instead pushing for clear regulations to prevent suppressing innovation in the U.S. cryptocurrency sector.
Featured image created with DALL-E, Chart from TradingView
Read More
- LUNC PREDICTION. LUNC cryptocurrency
- BTC PREDICTION. BTC cryptocurrency
- APU PREDICTION. APU cryptocurrency
- XDC PREDICTION. XDC cryptocurrency
- USD GEL PREDICTION
- EUR CAD PREDICTION
- POL PREDICTION. POL cryptocurrency
- EUR INR PREDICTION
- GLMR PREDICTION. GLMR cryptocurrency
- Black Ops 6 Zombies Actors Quit Over Lack Of AI Protection, It’s Claimed
2024-10-30 13:42