The CEO of Crypto-law has expressed concerns that the US Securities and Exchange Commission (SEC) is seeking to expand the definition of securities, a move he describes as thoughtful yet dangerous.
John Deaton discussed recent SEC initiatives in the cryptocurrency industry in response to a question posed by Mike Selig, a lawyer specializing in Web3 development and cryptocurrency.
Selig offered a football analogy to describe the SEC’s actions, stating that the commission had changed the goalposts in the middle of the game by altering the definition of digital asset categories.
“This is a well-planned and coordinated strategy,” he said, “The commission is proposing new and risky ideas that expand the very concept of securities.” Tokens such as XRP, LBC, and DRGN have been labeled “digital asset securities,” according to the SEC.
Wrapped tokens were classified as securities, and stablecoins were added to this classification since they represent “receipts for securities,” the regulator said.
According to Selig, the SEC may go even further and classify Ethereum as a receipt for securities in the future, which could lead to further regulation.
Deaton agreed, stating that the SEC is intent on labeling digital assets as securities in order to cover all sales, including those on the secondary market, regardless of the issuer or promoter.
The SEC previously stated its intention to tighten regulations for cryptocurrency investment advisers.