CryptoLaw founder and XRP holders’ attorney, John Deaton, believes that even if the pseudonymous Bitcoin creator Satoshi Nakamoto had sold BTC earlier on, it would not mean BTC is a security.
Deaton explains that in an investment contract, the underlying asset is not a security.
He explains what he meant: “If Satoshi would have sold some of his first BTC and the buyer didn’t do any mining himself but just sat back and waited for the price to go up, it meets the Howey Test.”
However, it appears that Satoshi never sold any of his Bitcoin, so this was not the case. Except for the 10 BTC sent to Hal Finney in 2009, not a single Bitcoin has ever been removed from any of the Bitcoin wallets since they were initially created, presumably by Satoshi Nakamoto.
In the early days of Bitcoin, Satoshi Nakamoto accumulated a sizable number of BTC by mining. According to the widely cited estimate, he mined about 1.1 million BTC.
BTC, ETH, XRP are all alphanumeric sequences: Deaton
John Deaton expressed his displeasure with the narrative being pushed by SEC Chairman Gary Gensler and some key figures in the crypto space that some tokens were securities.
He cited MicroStrategy Chairman Michael Saylor, who discussed some tokens that fit into the securities classification in an interview. Deaton criticized Saylor and pointed out that “XRP is software code. Even if Ripple sold XRP in an unregistered securities offering, it doesn’t mean XRP is a security.”
Deaton claims that, when taken individually, Bitcoin, ETH, XRP and other cryptocurrencies are nothing more than alphanumeric sequences, digital codes, or software codes. He went on to say, “The token itself is not a security. A token, like any other asset or commodity can be packaged, marketed, offered and sold as an investment contract.”
