- The SEC considers the “full set of contracts, expectations, and understandings” as securities.
- Coinbase’s Paul Grewal questioned how come the SEC didn’t bring ETH under its crosshairs.
- Ripple CLO Stuart Alderoty asked the SEC to admit that it has become a “twisted pretzel of contradictions.”
Coinbase Chief Legal Officer Paul Grewal has called out the Securities and Exchange Commission (SEC) for what he perceives as inconsistent treatment of cryptocurrencies, particularly in comparison to Ether.
In a post on X (formerly Twitter), Grewal highlighted footnotes in the Binance vs. SEC case where the regulator reportedly “regrets any confusion it may have invited” by repeatedly stating that tokens themselves are securities. The agency clarifies that by “securities,” it refers to the “full set of contracts, expectations, and understandings centered on the sales and distribution” of a cryptocurrency.
In the Binance case, the SEC specifically identified ten cryptocurrencies — SOL, ADA, MATIC, FIL, ATOM, SAND, MANA, ALGO, AXS, and COTI — as securities. The regulator argues that these assets and their associated activities haven’t changed significantly under the Howey Test, and thus remain investment contracts and securities.
Grewal questions why Ether was excluded from this list, suggesting that Ethereum transactions must have “changed in a meaningful way” to warrant different treatment. He implies that the SEC is suing crypto platforms without sufficient justification, given the lack of clarity in its approach.
Grewal: SEC Misleading the Court
Grewal also criticized the SEC for attempting to clarify its stance in footnotes, suggesting they are trying to mislead the court. He emphasizes that the crypto industry has always understood the SEC’s view on crypto as securities, and the agency’s current attempts at clarification are disingenuous.
Read also: SEC’s Policy Director Steps Down Amid Ongoing Crypto Scrutiny
Grewal references Ripple CLO Stuart Alderoty, who expressed frustration with the SEC’s apparent contradictions on X. Alderoty stated the SEC has become “a twisted pretzel of contradictions.”
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