- Morgan compared the development of cryptocurrencies to that of smartphones
- Fagel disagreed, saying that crypto is traded in exactly the same way as any other security
Pro-crypto Australian lawyer Bill Morgan has criticized the US Securities and Exchange Commission (SEC) for classifying Cardano’s proprietary cryptocurrency, ADA, as a security.
Two days ago, Morgan went on Twitter emphatically his doubts, questioning the regulator’s reasoning behind this claim.
Morgan compared the development of cryptocurrencies to the evolution of smartphones. He argued that when developers introduce updates and release information about the qualities of their products, it is just an attempt to stay competitive and increase sales. So a blockchain is no different.
Morgan pointed out that the SEC seems to view these efforts differently when it comes to cryptocurrencies like Cardano, however. The SEC considers ADA to be under securities law, while smartphone manufacturers fall outside the SEC’s assumptions.
Marc Fagel, securities attorney, early if there were 30 secondary market exchanges where smartphones are listed for other investors to buy for investment opportunities. In fact, crypto is traded just like any other security, and it’s not a clear-cut problem, Fagel said.
Morgan then resigned that cryptocurrency resembles the function of security when it is traded.
Crypto not a security by the legal definition, claims Morgan
Morgan has been tweeting about the matter for the past few days since the SEC classified ADA as a security in its lawsuit.
Tomorrow later responded to Fagel on Twitter, stating that ADA is considered a security by the SEC according to the lawsuit, especially since the initial coin offering (ICO). He believed that ADA tokens offered on foreign ICOs are beyond the scope of the SEC as foreign ICOs are outside the scope of the Securities Act.
“I don’t see how those sales fall under the definition of an investment contract under the Securities Act, because the law doesn’t apply to the ICO. They are not domestic transactions.”
According to Morgan, while stocks are inherently a security by the legal definition, crypto is not a recognized class of securities by the legal definition.
ADA has lost more than 25% of its value since the SEC’s enforcement action last Monday. However, the token appeared to be recovering over the weekend. At the time of writing, it was trading at $0.2834.
Source: Trade view
