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FameEX Hot Topics | SEC Classifies DASH, ALGO, and OMG as 'Unregistered Securities

2023-04-19 15:58:35

In recent times, the SEC has classified several cryptocurrency assets as unregistered securities, and many of these allegations have been made in lawsuits against different cryptocurrency exchanges. Bittrex is one such exchange that has been sued by the SEC for allegedly operating as an unregistered national securities exchange, broker, and clearing agency. The SEC claims that a few crypto assets, including DASH, ALGO, TKN, NGC, and OMG, are unregistered securities.

The SEC lawsuit against Bittrex cites several examples of how these crypto assets were sold as investment contracts, which are regarded as securities. For instance, the SEC states that OMG investors had a reasonable expectation of profits based on the efforts of others, and materials available at the time of the initial coin offering (ICO) indicated that the development of the OMG Network platform could lead to profits for OMG token holders. Similarly, the SEC argues that DASH purchasers invested in a common enterprise due to the existence of the Dash Control Group and the Masternodes process.
ALGO is another crypto asset that the SEC has classified as an unregistered security, as the regulator claims it was sold as an investment contract. Notably, SEC Chair Gary Gensler has previously praised Algorand's great technology and potential to create platforms like Uber. However, the SEC complaint still maintains that ALGO is an unregistered security.

The SEC lawsuit against Bittrex also provides specific details on when the different crypto assets were made available on the exchange's platform. DASH, for instance, was initially available on Bittrex in 2014 but was temporarily removed in December 2020 before being relisted in September 2021. The SEC argues that DASH was sold as an investment contract throughout this period, making it a security.

Overall, the lawsuits against various cryptocurrency exchanges have highlighted the lack of clarity surrounding the status of crypto assets as securities or commodities. While some crypto assets may qualify as securities if sold as investment contracts, others may not meet this definition. As regulators continue to grapple with these issues, it is possible that more crypto assets will be designated as unregistered securities, leading to further lawsuits against cryptocurrency exchanges.

Disclaimer: The information provided in this section is for informational purposes only, doesn't represent any investment advice or FameEX's official view.

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