After Ripple’s XRP, will the SEC focus on Bitcoin and ETH?

The U.S. Securities and Exchange Commission (SEC) litigation with Ripple and its operators not only impacted the company and XRP, but also the crypto community.

In fact, many in the industry have had to double-check that the digital assets they are handling and trading can be labeled as securities.

This is the most effective test, especially since the United States relies on precedents and laws from the 1950s to determine what could be an “investment contract” and, more generally, a stock market, a series of tests known as the Howey test.

While the court has yet to decide whether XRP is a security, attorney Jeremy Hogan is recently working to see if other cryptocurrencies fall under the definition of the Howey test above. Similarly, Hogan looked at Bitcoin, Ethereum, and several other altcoins.

In part, it’s impossible to determine when looking at Bitcoin. For many it is “completely decentralized”. Additionally, it was SEC’s Hinman who publicly stated that the world’s largest cryptocurrency was not a security. However, according to Hogan, Bitcoin is not as decentralized as most people believe.

A significant portion of the circulating supply of bitcoin is dominated by 40 companies, with only 2% of account holders holding 95% of all bitcoins in circulation.

“If the SEC had the slightest suspicion that the Bitcoin price was being tampered with or pumped by a single person or group of people holding large amounts of it, they could argue that there is a common business there and buying and selling this group. has the same effect as an investment – selling a securities contract.

However, such an argument is not valid, Hogan admits that Bitcoin is unlikely to be prosecuted for whatever that means.

In contrast, Ethereum has a relatively serious problem. It has a semi-centralized organization that oversees the network and has raised money for the project in the past. Here, the Ethereum Foundation has done the same through a pre-sale that presumably meets the popular corporate criteria of the Howey Test.

In addition, as Hogan in a. stressed Video Finally, the actions of the Ethereum Foundation after the MakerDAO hack and their impact on the value of ETH are “questionable”.

“But the Ethereum Foundation is a not-for-profit organization and not a separate entity the way the SEC wants to pursue – not a company trying to make money off of Ether. Wine, that’s good for him. “

According to Hogan, Ethereum 2.0 could cause further problems as validators in the new staking system will do so “in the expectation that their staking will bring them a profit”.

So can ether be considered a security? Not sure yet. Here, too, Hinman explicitly stated from the SEC that neither Bitcoin nor Ethereum are securities.

Other claims made at this point are believed to contradict the SEC’s own interpretation of the Howey Test. In fact, bad times will come with such a U-turn for the SEC, especially as Ripple is currently arguing that the SEC’s internal documents on employees’ trading activities are evidence of a lack of clarity on the part of the SEC.

The US SEC was concerned that it could lose credibility. If you change your mind, it will definitely happen. Additionally, it will also be shunned and resisted by the Bitcoin and Ethereum communities, which further catalyzes the “us and them” narrative that Ripple has sought to promote over the past few months.

Teacher

According to AMBCrypto

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