ZEC, ZEN and XLM are just a few under scrutiny...
Examining the intersection of cryptocurrency and government Was this newsletter forwarded to you? Sign up here. |
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Welcome to State of Crypto, a CoinDesk newsletter looking at the intersection of cryptocurrency and government. I’m your host, Nikhilesh De. You’re probably here because you signed up, but in case you're not a fan, you can unsubscribe here. Zcash, horizen and stellar might be securities, according to new regulatory filings. We’re starting to get even more clarity about the U.S. Securities and Exchange Commission’s efforts to bring the cryptocurrency sector in line with its existing regulations. For those of you who received the trial daily newsletter last week and want to provide feedback, I fixed the form! Also, I should clarify: That’s a separate product that the CoinDesk regulation team may publish, but it would not replace this newsletter, which would remain a weekly offering. — Nik |
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SEC headquarters (AaronP/Bauer-Griffin/GC Images) |
Grayscale Investments, a subsidiary of CoinDesk parent company Digital Currency Group, disclosed in regulatory filings that the SEC has been asking about its analysis of zcash (ZEC), horizen (ZEN) and stellar (XLM). Moreover, the regulator appears to have suggested that those three cryptocurrencies might be securities under federal law. |
The SEC has yet to begin any kind of formal effort to issue rules directing crypto exchanges to register as securities exchanges. In the absence of that formal rulemaking effort, we’re left looking at how the SEC seems to be approaching cryptocurrencies it sees as securities. News that it identified more cryptocurrencies as securities this year sheds (a tiny bit) more light on that question. |
ZEC, ZEN and XLM may be securities, Grayscale said in regulatory filings for its trust products based on those three cryptocurrencies. The SEC’s Divisions of Corporation Finance and Enforcement contacted Grayscale earlier this year, CoinDesk’s Danny Nelson reported over the weekend, asking about the trust products tied to those three cryptocurrencies. What’s more, reading between the lines, it would appear the SEC has said those cryptocurrencies might be securities. “The SEC staff has not provided any guidance as to the security status of ZEC and the sponsor has been contacted by staff from the SEC’s Divisions of Corporation Finance and Enforcement concerning the sponsor’s securities law analysis of ZEC,” the filing for Zcash said in June. The filing in August said Grayscale received a memorandum from its “external securities lawyer,” which led the company to feel comfortable in saying those three cryptocurrencies aren’t securities, but nevertheless, based on what the SEC has said, Grayscale “acknowledges that ZEC [etc.] may currently be a security, based on the facts as they exist today, or may in the future be found by the SEC or a federal court to by a security under the federal securities laws.” An observer can couple that report with the SEC’s previous claims that nine other cryptocurrencies are securities under federal law to get hints on how the agency is approaching the issue. There's two things that strike me about the SEC’s thinking... Continue reading here... |
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Key: (nom.) = nominee, (rum.) = rumored, (act.) = acting, (inc.) = incumbent (no replacement anticipated) |
| Nothing new to report, move along now. |
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| (The Washington Post) Peiter Zatko, Twitter’s former chief of security, has alleged major issues with how Twitter protects its systems from spam and hackers. (Rolling Stone) Rolling Stone takes a look at El Salvador’s bitcoin law and the impact on El Salvadorians since its rollout. |
Which institutes are most impacting the blockchain world? Tell us your thoughts in a five-minute survey. We're welcoming responses until Sept. 7. Take the survey here. |
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If you’ve got thoughts or questions on what I should discuss next week or any other feedback you’d like to share, feel free to email me at [email protected] or find me on Twitter @nikhileshde. You can also join the group conversation on Telegram. See ya’ll next week! |
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