Another victory over the SEC... but perhaps the SEC does not yet know

 

While the entire crypto community was enthusiastically celebrating Grayscale’s victory over the SEC, New York court has issued a decision that could have even stronger impact on the global crypto business.

The regulator wasn’t directly involved in the process - that’s probably why it went unnoticed. But look what happened! Yes, the SEC is not a party to the case, but it has suffered a crushing defeat!

At first, the commission was not in trouble. Several private investors complained to the court about the decentralized crypto exchange Uniswap. Investors complained that they bought scam tokens and lost money in the Uniswap’s liquidity pool. Referring to the American legislation on securities, they have demanded damages. It was at that moment the shadow of the SEC appeared.

The fact is that the plaintiffs largely repeated the SEC’s reasoning regarding cryptocurrency transactions: respondents are required to act in accordance with US securities law.

However, the judge unexpectedly demonstrated a deep understanding of the work of decentralized platforms. Look at main points from the judge’s decision and statements:

·       A decentralized platform cannot identify the scam token issuer and should not be held responsible for its actions.
·       The reference to securities legislation is illegal, this case does not fall under its scope.
·       And, perhaps, the most unexpected: commenting on his position, the judge said that he did not consider security.

And now we have a special surprise for the SEC: the decision was made by the federal judge Katherine Polk Failla. And she conducts the SEC vs CoinBase case. And I will be very interested to hear the arguments of the parties, especially the way the SEC interprets the Howey test.

Of course, this decision doesn’t mean a final victory for the crypto community. This is a specific case, and unfortunately it is unlikely to become a universal precedent. Moreover, even a full win of CoinBase and Binance guarantees nothing, the US tax service still insists on elimination of the cryptocurrency transactions anonymity.

However, the logic of the judge inspires optimism. More recently, I was looking with pessimism at the future of crypto business in the USA. Now we have a chance to be positive, and that’s the main good news today.

 

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