What if the USA government declares all cryptocurrencies securities except Bitcoin and Ethereum?

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What are the implications of the SEC issuing a ruling that all cryptocurrencies are securities except Bitcoin and Ethereum?

  • Lately I have been reading a lot about this possibility, and that the United States Securities Exchange, a US governmental body will issue a statement soon declaring all altcoins securities.
  • I have also been reading up on the implications of this announcement by listening to Podcasts guests who are legal experts in this space and the information is disturbing.
  • They suggest that the immediate legal ramifications of this would be potentially huge:
    • First Delistings of Altcoins from Centralized Exchanges in the US would occur: As any centralized exchange based in the US like Coinbase, Binance US, and FTX US would delist all such altcoins because they don't have licenses to buy and sell securities and the fines for buying and selling securities without a license are astronomical high.
    • Second the ruling of Bitcoin and Ethereum would clarify the status of these two tokens, so many investors sitting on the sidelines waiting for the US SEC to clarifiy their status would potentially all decide to buy Bitcoin and Ethereum, resulting in a mini bull run from the buying pressure. However, Delistings of all altcoins from Centralized Exchanges in the US would create huge selling pressure on all altcoins. This would most likely cause a worsening of the bear market for all altcoins.
    • Third, many US based exchanges might move from the US instead of delisting lots of tokens, who potentially paid large sums for the listing. Smaller exchanges who couldn't afford to pay large SEC fines nor can they afford to delist the coins which represent the trading volume of the majority of their customers, so they will move out of the US and any US influenced juristictions.
  • So we are basically looking at a huge drop in the Altcoin Market, and a potential mini bull run in the Bitcoin and Ethereum market.
  • I wonder if anyone else has heard of this news, and what do you think weill happen?

@shortsegments

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9 comments
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Let's talk about Binance:

  • Binance Improperly used users' funds to take over the Steem blockchain
  • Binance does not always refund your money - violating our property
  • Binance is almost constantly with Hive in maintenance mode.
  • Binance will never return any Hive Dollars you send to it
  • This user sent Hive to Binance, and they refuse to refund it!

Read about it here

Ionomy, HitBTC, and Bittrex have always credited my account when there was a mistake in the memo after communicating with support.

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They can't just decide that thousands of assets are securities all at once without even looking at them. In what universe can regulators blindly declare everything is a security without even knowing what it is? Government is a slow lumbering beast. The regulatory overreach will take YEARS to play out. Years.

But what if it happens doe?

First of all, I see very little evidence that the SEC can cripple an actual legitimate network. They aren't protecting investors and they aren't out to destroy crypto either. All they are doing is handing out fines and generating revenue for the agency. I see no evidence to suggest this strategy is going to change. If anything it will ramp up x10.

I wish they would try to declare everything a security because then we could force them to explain how Hive is a security and who the controlling centralized party is. They'd have to admit there isn't one and we'd end up getting a lot of attention.

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I agree that such a broad sweeping declaration seems irrational and illogical, and that's what scares me!
I hope your right.

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First of all, it doesn't make sense that cryptocurrencies like DASH, Digibyte, Monero, Dogecoin, Ravencoin, etc. would be declared securities and Bitcoin not, given that they are all essentially the same technology.

And the decision would only quicken the demise of the United States. Crypto exchanges, projects, entrepreneurs, and investors would simply move to more crypto-friendly jurisdictions like El Salvador, Dubai, Thailand, etc, leaving America's economy in the dust.

Such a ruling would probably lead to a temporary dip in the market, but eventually the prices would recover and all projects would re-adjust geographically. Similar to what happened when China banned Bitcoin / crypto.

Will be interesting to watch it pan out...

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I agree such activity would not make sense, but that’s what worries me, the world has stopped making sense.

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I don't really think it will happen but I have heard that they want to regulate crypto in general. If it does happen, I guess it will probably end up with a ton of court cases and I hope one or two will set a precedent that it is false.

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I agree it may not happen, but I worry because few people have the money to fight the government like XRP. Most pay the fine and move on..

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