If Satoshi Nakamoto had offered to sell 100,000 BTC for $100,000 when he was the only or one of the only Bitcoin miners, it would have been considered an offer of unregistered securities, John Deaton believes. This is the opinion that accompanied the pro-crypto lawyer and legal representative for XRP holders’ latest criticism of U.S. regulators regarding the cryptocurrency market and current legislation in this area.
The lawyer’s tirade began by saying that the term “investment contract” used by regulators like the SEC to define some cryptocurrencies is one of the most misunderstood terms in law right now, and the Howey test used to define a security is just as misapplied. It is noteworthy that both these subjects of law predate the middle of the 20th century, a point also highlighted by the lawyer.
In his opinion, for the cryptocurrency itself, it does not matter how it was distributed, like Ethereum (ETH) through an ICO or like XRP sold by Ripple. The method of distribution, even if it is recognized as an offering of unregistered securities, does not make the asset itself, in this case the digital code, such, Deaton says.
If we follow the logic promoted by regulators, it would appear that every altcoin is a security at the time of its distribution, Deaton concludes, citing the example of Bitcoin.
