A recent court ruling has significant implications for the cryptocurrency industry, particularly concerning stablecoins and their classification as securities. Judge Rakoff's decision in the SEC v. Terraform Labs case determined that Terraform Labs sold unregistered securities. The ruling suggests that stablecoins like UST, which are typically pegged to $1, can be considered securities when offered in conjunction with platforms that promise yields, such as Anchor Protocol. This has raised concerns about the implications for other stablecoins, like USDC, though some experts believe USDC is likely okay. Legal experts note that the ruling confirms the application of the Howey test to public sales of tokens and serves as a critical reminder of the rules for token launches. The decision also indicates that token market-making agreements are dead, which could have major consequences for the industry. Additionally, the ruling reaffirms that Americans can't sell tokens to Americans. The broader impact of the ruling on the industry is still being debated, with some viewing it as a reaffirmation of established practices, while others see potential challenges ahead for stablecoin offerings.
Reading the Rakoff ruling in SEC v. Do Kwon/Terraform and having a hard time seeing anything genuinely new. Where we are is where we have been for awhile: Americans can sell tokens, but they can't sell tokens to Americans. There are some interesting differences between now and…
Reading Judge Rakoff's ruling in SEC v. Do Kwon and having a hard time seeing anything new. Where we are is where we have been for awhile: Americans can sell tokens, but they can't sell tokens to Americans.
USDC is likely okay, but yield bearing stablecoins should take note. Any commodity (including a stablecoin) can be offered in a securities offering. That’s what happened with UST. The stablecoin was just part of the offering that included profits coming from Terra’s ongoing… https://t.co/zmjs7Y4jpY
Is a stablecoin a security? In SEC v Terraform, a stablecoin "on its own" is not a security due to the fact that it stays at $1 rather than generating a profit. But if it is promoted "in combination" with another platform that generates a profit, then it is a security. 👀👀 https://t.co/DfuxDqxoTX
Ruling on summary judgment motions in the SEC v. @terra_money case: 1. TFL offered and sold unregistered securities (UST + Anchor, Luna/wLuna, MIR) 2. No security-based swaps Plenty of good takes out there on the ruling so far by folks like @milesjennings and @lex_node. I'd… https://t.co/MMkMAMClzB
How can a stablecoin be a security? How can you buy something "pegged" to a dollar and expect profit from it? Per Judge Rakoff in the SEC v. Terraform Labs case, a stablecoin is a security when you can stake it for a return on investment. Regardless of whether you do, or not. https://t.co/Di0cpRsNEZ
Say what you want about Sol but feels super disingenuous for the CISO of Polygon to advertise a paper which says it can halt Solana then wait 4 hours before saying of course just theoretical and it has already been patches ago teehee https://t.co/2caZyS3PL4
> be me > wake up > very first msg in the morning: bombarded by "research" about Solana attack — popularized by ICP CEO (lol) — being spread by industry execs and even chief security officers > from "ETH University" (the name is unrelated, but simulation confirmed) obviously,… https://t.co/uqcZvrSOXE
Spicy research "These tests seem to confirm our basic understanding that Solana does not fully achieve consensus. In this paper we show how a single malicious validator, once elected as leader, might be able to halt the Solana blockchain." https://t.co/lNGJc9fKjx https://t.co/dEv1LpbhIo
Free Speech is officially dead! https://t.co/lqXpcBb5Vo
The SEC's victory over Terraform Labs today shouldn't surprise anyone. Applying the Howey test to public sales of tokens is straightforward. This is a good reminder of well established and critical rules of the road for token launches: (1) Don't sell tokens to U.S. persons for…
In Judge Rakoff's decision today finding that Terraform Labs sold unregistered securities, he argues that UST—ostensibly pegged to $1—was a security because it was offered in conjunction with Anchor Protocol, which offered a yield. Seems potentially bad for USDC? https://t.co/4Kn9aRhSl1
token market-making agreements (overt or covert) are dead, absolutely dead, after this ruling (they already were if you asked pretty much any U.S. cryptolawyer, but this seals the deal) https://t.co/d2c7IbUckY
>be me >take short nap >wake up >stablecoins are securities
Oh boy… will need to see the meat of this ruling but unless this was focused solely on Mirror assets, then any stance it takes likely muddies the water for other assets. That’s not a defence of Kwon either - just want to see a fraud charge, not a securities one. https://t.co/4GJP2UXWu4