Legal Expert Challenges SEC’s Confusing Definition of Crypto Assets

• Bill Morgan criticized the SEC’s statement on the difference between crypto assets and digital tokens.
• Morgan questioned the rationale behind the intrinsic value of digital assets and their connection to investment contracts.
• A crypto expert hinted at the SEC’s motive to influence court rulings on cryptocurrency classification.

Prominent attorney and crypto expert Bill Morgan voiced his bewilderment and frustration regarding the US Securities and Exchange Commission’s (SEC) statement in a legal brief related to a cryptocurrency case involving Coinbase. The statement in question pertained to the distinction between crypto assets and digital tokens, leaving Morgan perplexed.

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Morgan’s primary critique revolved around the SEC’s assertion that digital tokens merely provide access to the inherent value of crypto assets. He found this notion redundant, arguing that if digital assets possess intrinsic value, it is the assets themselves that unveil this worth, making the statement confusing and convoluted.

Moreover, Morgan questioned the SEC’s rationale behind linking the value of digital tokens solely to their associated investment contracts. He interpreted this as a veiled attempt to establish that the value of tokens arises exclusively from collective contributions within a shared venture. He further scrutinized the assertion that tokens lack value without ties to services or intellectual rights, particularly in the context of an investment contract analysis.

Responding to Morgan’s concerns, Anders, a well-known digital asset researcher, hinted at a potential ulterior motive behind the SEC’s statement. He suggested that the SEC might be trying to counter a previous “in dicta” ruling in the Ripple case, which deemed XRP not a security. 

Bill Morgan echoed this sentiment, cautioning that if the SEC succeeds in building a framework that classifies all crypto sales as investment contracts, only XRP and Bitcoin may escape being labeled securities, leaving other cryptocurrencies in a regulatory gray area.

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