Bitcoin Forum

As many of you probably know by now, the SEC is suing Binance (https://cointelegraph.com/news/sec-labels-61-cryptocurrencies-securities-after-binance-suit), and more recently Coinbase as well (https://cointelegraph.com/news/sec-sues-coinbase-crypto-exchange). How does this affect altcoins? 61 have so far been labelled as securities by the SEC:



Source: https://cointelegraph.com/news/sec-labels-61-cryptocurrencies-securities-after-binance-suit

---

This appears to be the biggest SEC lawsuits against crypto exchanges so far, that affects approximately 10% of the crypto market (based on market cap), ie $100 billion worth of tokens.

How do you think this will affect altcoins in the near future? Notably Bitcoin, Ethereum, Binance Coin and Dogecoin haven't been considered securities, so personally I think value could now flow into them after this announcement (apart from BNB), away from others that are at risk of being sued. Potentially these lawsuits will be fought and won, but otherwise the labelling of these securities may well stick.

Well they have been saying that xrp is a security for 2 years so i am still waiting for conclusion on that. Many of those i have no clue about and i am wondering why some other obvious securities are not in that list. Maybe they are too low marketcap and low visibility. But i have a feeling that this will be even longer process than anyone thinks. I might be an old man before this is settled.

No problem with BTC and DOGE since there were no ICO for this but I'm really curious now why SEC doesn't consider ETH as securities. One of the common denominator among those labeled as securities was being launched through a token sale. I'm also curious about ADA since their ICO was not available for US investors. It doesn't make sense for SEC to even list them as securities.

Those ICOs that opened their doors for US investors will likely lose their case.

One interesting factor is the strategy SEC are using to label altcoins securities. Instead of going to for altcoins themselves, they are going for the exchanges facilitating trading instead. This effectively means that the altcoins can't defend themselves against the accusation (as this becomes the responsibility of exchanges if they chose it to do so). This is similar to the SEC lawsuit against Kim Kardashian and Floyd Mayweather (https://decrypt.co/113912/kim-kardashian-floyd-mayweather-ethereum-max-lawsuit) for shilling Ethereum Max. They never actually filed a lawsuit against the coin, but only the promoters. So it very much seems they are trying to same tactic here again, in order to get certain altcoins classified as securities by courts, without the founders/executives of altcoins being able to defend themselves against it. I realise that XRP is the exception to the rule, as they are defending themselves right now which is probably costing SEC a lot of money, hence they are likely trying to avoid directly creating lawsuits against other coins with lots of funds available.

It sounds non sense. If SEC was thinking like that and SEC will not sue binance but the reality said the opposite thing. SEC is now suing binance. As you can see, that binance regularly making very huge profits from its product and it has so much reserved funds even more compared with XRP. Any opinion regarding it?

Yes, maybe I didn't explain the SEC's strategy so well here. As you point out Binance has a lot of funds to defend themselves (likewise with Coinbase). The hope is likely that these exchanges will settle in one way or another, that otherwise accepts the concept that certain altcoins (up to 61 of them) will be considered securities. After all, it's common that the SEC eventually will want to settle on a lower figure.

The strategy can otherwise be considered as follows:

1. Target major exchanges claiming A,B,C to Z are securities. This saves issuing 61 individual lawsuits against accused securities, that would cost a lot more money and time. This is the obvious move.
2. Hope that one of these exchanges accepts a deal and settles without going to court, thus acknowledging that certain altcoins are therefore securities, and therefore removing them from platforms.
3. With these settlements, then file lawsuits against said securities, with the accusation that major exchanges have also acknowledged they are securities, so they must be securities.
4. Hope that these altcoins being sued as securities also settle, given the so-called evidence that major exchanges have accepted they are securities, and also due to damaged reputations.

Obviously the main flaw in this logic is thinking that Binance or Coinbase will settle for anything less than a win. It's very likely they will be able to "pool funds" from the accused altcoins for their defence, given it's in the interest of these altcoins to be defended (even if not directly). Therefore it's more likely their legal defence budget will become a bottomless pit and will cost the SEC a lot of money in the long-run.

At least overall I don't see either exchange "rolling over" for the SEC, as it would set a precedent that they can't list new altcoins without their explicit approvals, which would be detrimental to their business models. In this sense, the SEC appears to very much be "trying it on" with the accusations of numerous altcoins that are securities, as even if they are, they will struggle to prove it (like with the XRP case).

As for the accusations against Binance, which is considerably different to that of Coinbase (that's solely selling securities related), it's likely they'll settle on the accusation of co-mingling funds and allowing US customers to use their platform, as it's not worth defending if there is enough evidence to support these claims. As for the securities argument/claim, I doubt they'll go down without a fight.

In summary, they are trying "catch all" lawsuits against these two companies (so far), in order to avoid dozens if not hundreds of individual lawsuits, that they simply don't have the time for.

The SEC only seems to have a bad impact, and does not have a strong path just because the US government seems to seize over the crypto world that the SEC as the king of power is trying. what about the XRP event looks very competitive is less clear. The SEC is nothing to the big markets, CZ or the crypto world because there are already countries that support altcoins as role users. a lawsuit like this had appeared in 2017 when China fully supported it because it was hindered by the US

News like this could be said as FUD, In order for the market to be corrected, proved as soon as the news released the crypto market corrected  range of 10%, however it did not last long, today has already begun to show price recovery. After all, the claim applies to the stock exchange operating in the United States.

Seriously I have been asking the same question for some time now, why didn't include ETH? I think SEC is purposely doing this to cause panic in the crypto space and this is not the first time they are doing this, while other countries are seeking for ways to incorporate or adopt crypto, SEC is going after them, In the end, this might lead in the US having no relevance to crypto space in the future, we are watching

maybe if SEC really want to sued altcoin because it is considering a securities almots 90% are securities. because most of them are invested by fiat. the only coin considered as commodity are Bitcoin and old PoW coin like litecoin, doge, dash,monero and zcash. CMIIW

Determining whether Bitcoin, Ethereum, Binance Coin, Dogecoin and other altcoins are securities is still being discussed and there is no consensus from financial regulators and supervisors around the world. This assessment directly affects the legal and tax regulations applicable to these cryptocurrencies globally. If the SEC continues to issue decisions to sue and evaluate many other cryptocurrencies as securities, this will cause confusion and negatively affect the cryptocurrency market in the future. This can undermine investors' confidence and cause the weakening of crypto projects that have not been identified as securities. Legal and tax regulations if applied on these cryptocurrencies could push prices down and affect the development of the crypto market as well. Investors should carefully consider and research carefully before investing in any cryptocurrency and monitor the decisions and policies of financial regulators to make informed decisions. reasonable investment.

Not sure affect the effect long term, but obviously, at some point in time those projects mentioned might see a downside because of this. Anyhow, I think this is forthcoming, but the timing would have been perfect, we are still in the bear market, so I wouldn't be surprised the price affecting negatively.

However, we all know that when the bull run starts, no one can stop it. So the best gauge will be next year, when we suddenly goes into the bull run. And all those coins mentioned might be enjoying a good run despite them being in the list of SEC who consider them securities. And it might just be affecting the US investors if I'm not mistaken.

The recent SEC lawsuits against crypto exchanges were significant, impacting around 10% of the crypto market, equivalent to about $100 billion worth of tokens. Considering the situation, it makes sense to speculate about the potential impact on altcoins, specifically Bitcoin, Ethereum, Binance Coin and Dogecoin. Yes, to some extent this has a bearing on these lawsuits which could result in protracted legal battles, and securities designations can last a long time. The future of altcoins hinges on the outcome of these cases, and only time will tell the true impact on their value and market dynamics.

Well attacking CEXes would be obviously most effective starting point, they would be basically exchanges buying and selling unregistered securites in the eyes of SEC.

And you can't really leave all this (declaring some altcoins are securities) to the shoulders of SEC. Many of these currencies has very questionable marketing tactic to begin with.
In sale phase of a token/coin, marketing itself can define if the token or coin is a security. Which is one of the reason when they are attacking the third parties providing the hype for tokens/coins. And i am guessing that most promoters got free hands on promoting and are promoting those assets illegally, hinting any growth in investment price is enough.
 
I am not sure what kind of place twitter is these days but at some point they needed to add more restrictive rules for promoting things like cryptocurrencies. Which most people didn't seem to follow, but i am guessing that was twitter's way of washing their hands so they won't get sued by allowing this.

The regulatory classification of cryptocurrencies, including XRP, can indeed be a complex and lengthy process. Different regulatory bodies around the world have varying views on the matter, and their assessments can take time to reach a conclusive decision.The classification of a cryptocurrency as a security typically depends on how it was issued, marketed, and the level of control and involvement from a centralized entity. Regulatory bodies, such as the U.S. Securities and Exchange Commission (SEC), evaluate these factors to determine if a token qualifies as a security under existing securities laws.

The funny thing about this is that they decided to exclude Ethereum from the list, there is no way the likes of Solano, Cardano, BNB, Tron, XRP are Securities and Ethereum is not, I think the case of XRP with SEC is now more interesting and I feel it is in the interest of the space that XRP team win their case against SEC, if they do, I think it will be a great win for the whole space, if they lose I don't know the team with huge wall chest that can successfully go against SEC and win. I think the Proof of Work (POW) coins will gain more adoption and people will likely go back to POW coins and it will be free for all rather than VCs getting huge token allocation

This is what Garlinghouse was also saying which if they win the case, evey altcoin will also escape from SEC's troling every altcoin. Too bad for LBRY since they were themfirst to fold and they have no funds to fight back.

SOL, ADA, BNB, TRX, qnd XRP wil give SEC a hell of a fight. If ETH is not a security then the rest will also not be a security, they're all the same.

Yes thats correct. It was on US territory only. Well its seems SEC finding a way to create issue here, but if they really wanna out of crypto world, then so be it. All other countries who are joining the wagon would likley be rewarded in the long run. Bull season will likely be a hell of a move and these securities they are keep mentioned and flagged would be nothing. Funny though Gary Gansler promoting algorand few years back but now listed on their wanted tops.

It is very strange that the SEC did not wait for the final court decision on its lawsuit against Ripple Labs and launched a further massive attack on cryptocurrency through cryptocurrency exchanges. It seems that the SEC is sure to win with a lawsuit against XRP, or they simply hope that the decisions of other courts may be in their favor and then they will play on it. In any case, such lawsuits harm the cryptocurrency market.
It cannot be said that if the market began to recover after the lawsuits, then the danger has already passed. Prices in this market will react every time there is a change in the lawsuit.

Never heard of those mirrored securities. Where did you read this because mTWTR which is basically Twitter is obviously not trading anymore after Elon purchased it. So this is obviously outdated.

I am not surprised however that they deemed these mirror securities are prohibited since they need to be traded
On a regular broker to prevent certain personnel from never purchasing these securities like people from a sanctioned country.

As far as I understand, they are "assets" that are supposedly pegged to the stock market prices of said assets, but no idea how they are actually backed. There are otherwise a few exchanges that support this.

Sure mTWTR is an outdated example I guess, its simply based on on the SEC lawsuit and still applies as was available in the specified time-frame. Probably others aren't as available as they sued to be either.

I also heard this back then I thought XRP was finished after the announcement about the SEC going to get them because of some sort of illegal activities; the price of XRP at that time had dramatically decreased. But XRP is still here, and its price is still at a decent level, I wonder what happened? did they win their case against the Sec lawsuit?

I think it depends on how great the altcoins threat is to them because if they find out that certain altcoins have only small transactions or little liquidity, it won't matter to them. But this kind of negative adjustment by the SEC throughout the years has been affecting the growth of the crypto market which will slow the legalizations by other countries for bitcoin in the future.

I do not rule out that someone is trying to greatly reduce the value of this portfolio of altcoins in order to be able to buy them at a bargain price in anticipation of the impending bull run. The big cryptocurrencies are not affected simply because big capitals are already involved in these assets and such accusations could not badly shake their ecosystem and therefore their price. So they are neatly bypassed, although they could also make the list, especially BNB and DOGE.

Personally I just think it's part of the 4 year cycle that occurs, the inner workings of it as it were. It's not just Bitcoin going up for a year, then correction, recovery and consolidation, but also the recovery year in the past has been with altcoins failing to keep up with Bitcoin (such as in 2019). 4 years later, we are at the same period as Bitcoin begins to recover in price and it's dominance recovers as a consequence.

Then naturally next year the diversification will return to altcoins, in anticipation of another bull market. It's also not necessarily speculators selling altcoins for fiat currency in order to get them cheaper. They may well be more expensive next year against the dollar. But I'd say it's very likely they will be cheaper to buy with Bitcoin next year, hence there is no reason for speculating on them directly right now.

The SEC has designated several coins as securities, as we have witnessed with XRP in the past. This means that the growth of these coins will be significantly impacted, as investors will be reluctant to invest their money in such coins. Almost all promising coins have been labeled as securities, which is not favorable for the overall cryptocurrency market. As a result, we can expect to see greater growth in BTC and Ethereum.

All of this makes sense, unless we witness market cycles break down and stop working. Personally, I don't give much credence to all this crushing on cyclicality, because it could all break down at any moment and cycles, or market trends, could stretch out, over much longer periods, like 5 or 7 years. It would be too easy to hope that everything would repeat all the time every 4 years.

Well, I think it's rational to short cryptos which may have a smaller market due to their categorization as security. I don't really believe they will recover that much. And there were some of the "big" cryptos in the list, such as Cardano.

Regarding "the next coins to be classified as securities", I agree with BNB being a candidate (wasn't it already categorized as a security recently?), but DOGE is decentralized and has no central authorities, neither does it use Proof of Stake or other mechanisms which could be interpreted as "common enterprise", so I believe it's not "in danger". I would not be so sure about ETH, and about almost all coins except these (https://bitcointalk.org/index.php?topic=5456378.msg62407618#msg62407618) (with DASH as an edge case which already has been accused to be one).

Here I agree with Xal0lex. We have to take into account that there were, until now, only two cycles of about 4 years (2013-17 and 2017-21), the previous cycle had only 2 years, and the 2017-21 cycle is debatable due to the low in 2020 and the 2019 high (in some graphs, it's shown as two cycles: 2017-19 and 2019-21).

However I don't see really the connection to the SEC "securities" debate. That's clearly a move independent from market cycles, triggered by a identifiable event (or a group of events, as there are various lawsuits and SEC statements involved which have driven the value of those coins down).

All I see here is double standard on the part of SEC, Ethereum was excluded from the list because Ethereum team has warmed herself  to the SEC, Ethereum is one of the most successful ICO in the space and what really caused ICO boom in 2017/2018, I think all these projects needs to come together and fight a winnable fight in my Opinion, if Ethereum is not a Security so is 90% of the tokens in the space, there are some mined tokens also on the list which is very disturbing.

This is the problem with SEC they have the standard and why they are raising this concern late when every investors are already exposed into this project so its hard to say their real motives when it comes to this one. ETH is a good project, probably they anticipated this scenario and adjust accordingly which other developer can also be done before making a project, make sure that SEC will not see any irregularities with your projects or else, it will not be easy for you to attract more investors.

I find the inclusion of BUSD in this list by the SEC to be ridiculous. Why would be an asset which people hopes or wants to continue to be stable through time to be consider a security?

Also, in the case of DASH it could be because the system of governance they use in order to make the protocol to advance further in adoption and volume, still there are some many coins and tokens which are not necessarily shitcoins.  ::)

It gives me the impression the SEC is really trying to make Cryptocurrency to get out the way before they launch their centralized CBDC.
The Monero guys must be bullish in the long term on this despair showed by the SEC.

The market is still very young, so these cycles can only be a coincidence and do not determine in any way what should happen in the future. I see these 4-year cycles mentioned very often on this forum, and in my opinion, cryptocurrencies are still too young to use this cyclicality as a pattern or something like that. It might make sense if, for example, 80 years go by and this cyclicality keeps repeating itself over those years.

Sure the 4 year cycles remain subjective, as well as in regards to Bitcoin's dominance that I was mainly referring to. In 2019 Bitcoin saw a considerable rise in both price and domination, so I see 2023 being similar. Even though despite 2022 bear market Bitcoin's dominance remained relatively flat compared to 2018 bear market when it also rose back above 50% - which I generally consider a key metric.

Overall in the past 6 years it's ranged between around 35% and 70% and generally above or below 50% it continues to move in the same direction, at least historically this has been the case. So my general point was SEC lawsuits or not, I've still been anticipating Bitcoin's dominance to increase along with price this year, and if anything have been surprised it's taken this long to start climbing again.

No doubt, your point about the SEC's decision to classify BUSD as a security is puzzling. Its like labeling a spoon as a knife; it just doesn't fit. A stablecoin's value isnt expected to appreciate over time but to stay stable. Its in the name, for Satoshi's sake

As for DASH, its governance structure does differentiate it from others. However, it still doesn't fully explain the SEC's reasoning. Maybe they are simply overwhelmed by the sheer diversity in the crypto world.

Your theory about the SEC prepping the stage for CBDCs isnt far-fetched. Its like a chess game; they're positioning their pieces for the end game. As for Monero, yeah, they're probably smiling ear-to-ear. The SEC's frantic moves might be fueling the bulls for privacy-focused coins.

I hope they will win. But it is very hard to think that those 4 coins would also be considered securities. I think it will. If we look at the moment, of course, this is the biggest lawsuit against cryptocurrencies. Even though it only operates in the United States, the SEC can deal a huge blow to cryptocurrencies. It's tough because they filed a lot of lawsuits against Binance and if it's going to be criminal charges, I think all cryptocurrencies will be affected.

My guess is that it's for the same reason that BNB is on the same list. In my opinion, the SEC is after altcoins; they can't go after Bitcoin, which is the main reason that it didn't collapse during the whole ordeal. The list includes a large variety of Altcoins, many of which I haven't heard of before, but there are some quite well-known ones, such as Polygon or Cardano. On the one hand, I'm all in on going after scam coins such as LUNC and LUNA or coins that basically serve no purpose, such as Bittorrent, of which I'm not quite sure if its developers even bother with it anymore. Thus, I understand why some coins were included, but some others are certainly not securities.