• The U.S. Securities and Exchange Commission (SEC) recently classified Cardano’s native cryptocurrency, ADA, as a security.
• Pro-crypto Australian lawyer Bill Morgan has criticized the SEC for this decision and compared the development of cryptocurrencies to that of smartphones.
• However, securities lawyer Marc Fagel argued that crypto is traded exactly like any other security and it’s not a clear-cut issue.
The SEC’s Decision on Cardano
The U.S. Securities and Exchange Commission (SEC) recently classified Cardano’s native cryptocurrency, ADA, as a security. This decision sparked controversy among lawyers who have their own views on the matter.
Pro-Crypto Lawyer Morgan’s Take
Pro-crypto Australian lawyer Bill Morgan has criticized the SEC for classifying ADA as a security. He compared the development of cryptocurrencies to that of smartphones and suggested that when developers introduce updates and disclose information about their products‘ qualities, it is only an attempt to remain competitive and increase sales – not necessarily indicative of an investment contract or similar activity warranting regulation by the SEC .
Lawyer Fagel’s Counter Argument
However, securities lawyer Marc Fagel argued that crypto is traded exactly like any other security which is why it should be subject to similar regulations as any other type of security. He asked if there were 30 secondary market exchanges where smartphones are listed for other investors to buy for investment opportunities – suggesting that crypto should similarly be considered under securities law since it is being traded in exchange for profits just like traditional securities are .
Morgan’s Response
Morgan responded to Fagel by admitting that cryptocurrency does resemble the function of a security when it is traded on these exchanges – especially since ADA tokens were offered in overseas ICOs which lie outside the purview of the SEC . However he still maintained his position on how crypto does not fit under statutory definitions of what constitutes a „security“.
Conclusion
Ultimately , this debate between Morgan and Fagel demonstrates that while both parties acknowledge cryptocurrency can act similarly to traditional securities in certain contexts , they disagree about whether or not such behaviour warrants regulation by regulatory bodies such as the SEC .