Hong Kong-based Animoca Brands is unfazed by the SEC deeming the SAND cryptocurrency a security in its recent complaints against Binance.US and Coinbase, South China Morning Post reported on June 8.
Animoca co-founder and chairman Yat Siu told the newspaper that the company operates globally and as such is not too concerned with what is happening in one jurisdiction.
Siu said:
“The SEC is focusing on the US, so that shouldn’t impact Animoca Brands in broader markets where Sand is widely available and accepted, including in more progressive jurisdictions like Hong Kong and Japan.”
America’s “blockchain-hostile” approach
Siu said the company’s strategy has been to focus primarily on non-U.S. markets because of the country’s “blockchain-hostile” approach from regulators, and recent events have only spurred it to “place more emphasis on other markets”.
Despite Siu’s casual statements, the SEC’s belief that many cryptocurrencies are securities will have legal implications for companies involved in those tokens, which could be cross-border.
Meanwhile, The Sandbox co-founder Sabastien Borget told media outlets on June 8 that the platform’s day-to-day operations are not affected by the SEC’s characterization of SAND. Borget added that the company disagrees with the SEC’s opinion.
However, it is unlikely that there will be any impact on operators and issuers of these cryptocurrencies until legal proceedings are completed, which could potentially benefit the crypto industry.
Reasonable profit expectation
The SEC’s complaint against Coinbase and Binance.US includes securities law violations for selling multiple cryptocurrencies it deems securities, including top ten projects like MATIC and ADA — as well as multiple multiverse projects like SAND and MANA.
According to the SEC, these cryptocurrencies are securities under the Howey test because they were issued as a fundraising tool for the companies behind them and buyers expected a return on their investments.
Regarding SAND, the SEC’s complaint states that the cryptocurrency was used to raise $3 million through private sales on Binance.com, and investors were “reasonably led to expect” to benefit from [the company’s] efforts to grow the Sandbox protocol.”
Whether the SEC’s claims become law is yet to be determined by US courts.
In the meantime, most companies seem to have written off growth in the US, such as Animoca, amid regulatory uncertainty, and are already shifting focus to more dynamic markets such as Asia and the Middle East.
