Can the SEC declare Bitcoin a security and destroy the market?
- December 31, 2022
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- Attorney John Deaton has also labeled Bitcoin as security and warned that SEC could soon turn on the digital asset.
- Evan Van Ness, an Ethereum maximalist, tweeted that the Bitcoin production block is controlled by two entities.
The US Securities and Exchange Commission (SEC) is currently in court with Ripple Labs over the security status of XRP. As the case is edging closer to its final ruling, Attorney John Deaton has labeled Bitcoin as security and warned that SEC could soon turn on the digital asset. Evan Van Ness, an Ethereum maximalist tweeted that the Bitcoin production block is controlled by two entities.
MAJORITY OF #Bitcoin BLOCK PRODUCTION CURRENTLY CONTROLLED BY TWO ENTITIES
Out of the last 1000 $BTC blocks, 501 have been built by Antpool and FoundryUSA
Two pools control more than 50% of block production!
In response, former SEC enforcement attorney John Reed Stark questioned why the asset is then not regarded as security that requires SEC registration. Stark has suggested that Bitcoin is an unregistered security due to its mining centralization.
Deaton also responded that the security status of Bitcoin has been a topic of discussion in the past with some SEC officials regarding it as an unregistered security.
There are others at the SEC who believe the same thing. In 2015, some at the SEC argued BTC was an unregistered security. This is why it’s absurd for Maxi’s like @saylor and @maxkeiser to encourage/celebrate the SEC’s actions 🆚 XRP and other tokens. SEC overreach is bad for the USA.
Bitcoin and Ethereum maximalists’ support for SEC could backfire
Deaton has in the past warned that SEC could turn on Ethereum for switching to Proof of Stake. His mention of Bitcoin maximalists and Ethereum proponents comes as a result of their lack of support in the Ripple vs SEC lawsuit. Michael Saylor and Max Keiser have both shown support for SEC with Saylor claiming Ethereum and Ripple are committing security fraud.
According to him, ETH and XRP are unregistered securities and should be shut down. In the past, Ethereum co-founder Vitalik Buterin also labeled XRP as centralized. Buterin’s position is due to Ripple’s comment in a court filing two years ago that Ethereum was China controlled. In August, Buterin said XRP has lost its protection from the Ethereum community.
Deaton, however, believes that the support by the anti-Ripple community and the so-called Bitcoin maximalists could come back to bite them.
Perfect picture summarizes the danger of supporting government overreach just because the current overreach doesn’t involve the asset of your choice.
Brad Garlinghouse, Ripple Labs CEO, has called on the entire crypto community to support them, as a victory for the SEC could affect the rest of the digital assets.
U.S. Congress candidate January Walker also made a similar claim.
The world follows the actions of the USA, and how the government handles one of us, sets precedence for how they handle all of us. Instead of battling against each other claiming one group is better than another we need to work together for the right legislation.
President of the Texas Blockchain Council, Lee Bratcher, however, thinks otherwise. According to him, the XRP model fits the Howey test and should be categorized under security.