The question on everyone's mind is: Which altcoins can escape the grip of the SEC?
Last week, the lawsuits filed by the SEC made a significant impact.
The selection process employed by the SEC for the coins mentioned in the lawsuits is truly an important topic. While there are numerous speculations surrounding this issue, let us make an inference based on the legal proceedings that followed.
The Initial Coin Offering (ICO) in 2017 was an entirely illegal process. Without leaving any room for doubt, during this process, all the coins sold for investment purposes possessed the characteristics of securities.
Indeed, the intervention by the SEC brought an end to this process, but the necessary legal regulations were not implemented.
How can a coin avoid being classified as a security?
To claim that every VC investment is a security is actually a weak legal argument.
Legally, coins can be exempt from security status through the Simple Agreement for Future Tokens (SAFT) method. This method has two conditions:
1. There will be no public offering, meaning that only VC investments are allowed.
2. VC firms will refrain from selling these coins for at least one year.
Based on these two criteria, we can say that altcoins that have received investment are in a strong position against the SEC in court.
What about Ethereum?
Ethereum conducted its ICO in 2014.
In this sense, based on the events that took place in 2014, Ethereum undoubtedly falls under the category of securities. However, considering that the SEC filed lawsuits against ICOs in 2017, there is an argument among those who believe that Ethereum could be exempt from current regulations: "Although Ethereum conducted an ICO as a security in 2014, it has since transitioned into a decentralized structure."
Particularly after the transition to Proof of Stake (PoS), we do not know how Ethereum can defend this argument in court (there is no doubt that it was more decentralized under Proof of Work). However, it would not be incorrect to say that its argument is stronger compared to other altcoins, at least to some extent.
We do not know which altcoins meet the criteria mentioned above. However, it is possible that altcoins based in the US, not mentioned in SEC lawsuits, are concurrently navigating these processes with the SEC.
