[파커] US cryptocurrency regulation, how will it be applied to coins

[파커] US cryptocurrency regulation, how will it be applied to coins

Cryptocurrency, virtual assets, bitcoin, regulation

[파커’s Crypto Story] The news of the U.S. cryptocurrency regulation, which is leading the global financial order, has been spreading in recent years. In particular, the SEC (US Securities and Exchange Commission) suspicion of selling unregistered securities of Ripple in December, and each coin project is also keen on regulation. As the word’sales of unregistered securities’ suggests, the United States tends to measure regulations based on the criteria for determining securities. #Bitcoin secures a solid non-securities coin status The representative US regulator that directly enforces cryptocurrency regulations is the SEC. Whenever the SEC imposed sanctions on certain coin projects, the SEC has put it on the basis of’unregistered securities’. In this process, the SEC screens out whether the coin is securities or not through a Howey Test. The subtest began in 1933 when a company named Sub, who owns an orange plantation in Florida, USA, was charged with selling farm land for investment purposes rather than farming. At the time, the criteria for the sub-test were ▲investment of money ▲investment in a common business ▲expectation of investment profits ▲profit from the efforts of others. For example, if you buy cryptocurrency through fiat currency or other assets and try to earn a profit from it, it is an expected concept of ▲investment of money ▲investment profit. In addition, if the invested money belongs to a specific company or is generated by others (developers, etc.), rather than yourself, it can be considered as ▲investing in a common business ▲investment in the profits from the efforts of others. Among the sub-tests, the most controversial items in cryptocurrency are ▲investing in a common business ▲profit from the efforts of others. In the case of Bitcoin, it can be said that it is the most free of all coins. The investment of money and expectations of investment profits are inevitable, but Bitcoin does not have a joint venture itself, and founder Satoshi Nakamoto has no substance. Soon, it is difficult to determine the profits from the efforts of others because the operating entity is not clear. As a result, Bitcoin has been certified as “not a security” by the SEC and other regulators. #Received non-securities certification with Ethereum and Bitcoin… However, due to the’Ethereum 2.0′ issue, Ethereum is also a coin that has been found not to be a securities from the SEC. However, there was a lot of controversy in the early days because it went through ICO (Cryptocurrency Disclosure). When it comes to ICOs, U.S. regulators are basically sticking to securities. This is because the ICO itself is an act of raising funds to a specific joint enterprise such as a developer, and the profits from the investment were derived from a third party company, etc. Ethereum also secured funds through ICO, so in the beginning, the position that it should be viewed as a securities prevailed. However, after the ICO, the development organization and community were decentralized without any subject, and the structure of profits due to the founder of Vitalik Buterin Ethereum and the Ethereum Foundation, who led the project, was no longer there. Decentralized governance has a unique structure in which investors who invest coins become developers of the coin or contributors to the ecosystem. Accordingly, the U.S. regulator concluded that Ethereum was not a security because it continued to maintain decentralization after the ICO. However, there is also an opinion that the situation may change when Ethereum 2.0, which is based on the transition from PoW (Proof of Work) to PoS (Proof of Stake), is actually operational. In this regard, Heath Tabert, chairman of the US Commodity Futures Trading Commission (CFTC), said in 2019, “Ethereum 2.0 rewards only a limited number of people (entry barrier: holding 32 ETH) through staking. This can be seen as a sort of dividend.” He argued that Ethereum 2.0 could be a security. However, there are many industry opinions that Ethereum 2.0 cannot be a securities as long as the criteria for conforming to the subtest include’profit from the efforts of others’. It is not a structure that requires only staking, but a system that can reduce the number of holdings if the block is not properly verified. #Litecoin, Coin Stock Controversy It is not well known because of the unexpected power of Bitcoin and Ethereum, but Litecoin is also relatively free of coin securities issues. Litecoin has its founder, Charlie Lee, and a related foundation. However, it is not a structure in which Litecoin investors benefit from the efforts of Charlie Lee and the Litecoin Foundation. In particular, Charlie Lee wrote on Reddit in 2017 that he would donate and sell all his Litecoins, and then actually dispose of all of them. Since then, Litecoin’s decentralization has been further strengthened. In addition, it is difficult to say that there is a central operating entity as the operating entity is decentralized, like Bitcoin and Ethereum. It can be seen as a project that is in a surprisingly strong position in the coin securities controversy. . In response, virtual asset research firm Bittouda said, “▲When the owner of the project can be identified ▲ When there is a financing or investment activity that violates the Securities Act ▲ When there is no regulatory object other than the platform or technology itself, DeFi is regulated I can be.” Looking at DeFi from the perspective of sub-tests along with the rationale presented by Bituda, it is highly likely that the standards for applying securities will vary widely by project. For example, in the case of the founder of Andre Croñy Wion, the project’s governance token YFI was not pre-mined or sold. Also, in the process of establishing the project, I did not distribute my share of YFI. We distributed YFI only to users who provide liquidity to WYON Finance. In this case, it becomes difficult to regard it as a security even from an institutional standpoint. On the other hand, if a certain centralized entity makes profits from token sales while advocating DeFi, the probability of being identified as a security increases. However, most of the major DeFi projects, which are well known in the market, are often aimed at improving decentralized governance itself, which can be seen as relatively free from regulatory risks. #Stacks is not a traditional major coin after being certified for securities and applying for non-securities after token sale. U.S. regulators consider the sale of tokens through fundraising such as ICOs as securities. In the case of Waves, it has received industry attention by being certified as a securities from the beginning and selling it. However, Stacks recently wrote a legal opinion to the SEC for the transition to non-securities ahead of the mainnet 2.0 release. If the conversion is successful, Stacks is no longer considered a security, but a commodity. This means that it will be possible to trade on US cryptocurrency exchanges. The reason for Stacks’ registration of non-securities applications is known as’securing decentralization’. When Mainnet 2.0 is released, it is impossible to unilaterally modify the Stacks blockchain or issue new tokens. Accordingly, after the launch of the mainnet, it was judged that it had deviated from the elements of securities and applied for non-securities. However, since registration has not been completed yet, it seems that we will have to watch the situation in the future. If a non-securities license is confirmed by the SEC, a new strategy will arise for coin projects. Reporter Park Sanghyuk [email protected]