Amid lawsuits against cryptocurrency exchanges Binance and Coinbase, the classification of the four altcoins remains one of the most debated topics. John Deaton, an XRP advocate, announced on Twitter that these crypto-assets do not qualify as securities. Deaton emphasized that ADA, MATIC, XRP, and ALGO represent a sequence of digital code “traveling through cyberspace.”. The designation of crypto-assets as securities should be determined on the basis of the Howey case, which set a precedent for evaluating investment contracts, the lawyer said.
The lawyer believes that simply labeling a crypto-asset as a security is unconstitutional, regardless of who is selling or the circumstances surrounding the trade.
The lawyer’s remarks were made in response to a tweet by another cryptocurrency lawyer, Jeremy Hogan. Marketplace Coinbase recently filed a motion to dismiss the SEC’s lawsuit, declaring the regulator’s claims to be outside the legal framework. According to Hogan, Coinbase is trying to protect numerous cryptocurrencies that are not related to securities, and this is a very difficult task for the exchange. Hogan cited Polygon Labs’ recent announcement that the MATIC cryptocurrency was originally aimed at the international community, not the U.S. market. To which Deaton referred to the litigation with the Telegram Open Network (TON) platform, in which a court blocked the distribution of Gram tokens not only to Americans but also outside the U.S.
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“We don’t need to read the court’s decision in the case involving the Telegram Open Network platform, from which it is clear: the GRAM token was not a security. We need to rely only on the Howie case. “The Supreme Court deemed it ‘immaterial’ whether the underlying asset is speculative, has intrinsic value or not,” Deaton wrote on Twitter.
Earlier, John Deaton said that the SEC is deliberately trying to broaden the definition of securities to further apply it to any crypto-assets.