Attorney Bill Morgan says every token other than Bitcoin would have become a security by default if Ripple did not fight the SEC in court.
Bill Morgan, an Australian-based lawyer, has joined other crypto community members in reacting to news of the SEC’s recent settlement with Stoner Cats 2 LLC (SC2).
It is worth noting that SC2 became the latest company to settle with the SEC after it was accused of conducting an unregistered crypto asset securities offering.
Per a recent announcement, the SEC charged SC2 with raising $8.2 million by selling over $10K Stoner Cats animated series NFTs in 2021. SC2 did not admit nor deny the charges.
To settle the charges, the company agreed to comply with several SEC measures, including paying a $1M civil fine. Notably, SC2 has joined a host of crypto-related companies, including Kraken, that have settled with the SEC.
Attorney Morgan Reacts
Reacting to the development, Attorney Morgan said although these settlements do not create any precedent, they somehow facilitate the securities regulator’s creep into the crypto industry.
Interestingly, he pondered on what could have been the fate of crypto if leading blockchain company Ripple Labs had not engaged the SEC in a legal tussle.
According to the legal expert, every cryptocurrency other than Bitcoin could have become a security by default if Ripple did not “fight the SEC in court.”
“Every token itself other than Bitcoin would be a security by default. Good that @Ripple fought & there is one token a court found not to be a security,” said Attorney Morgan.
These settlements do not create precedent but they steadily facilitate SEC regulation creep into crypto. Imagine if no company like Ripple fought the SEC in court. Every token itself other than Bitcoin would be a security by default. Good that @Ripple fought & there is one token… https://t.co/NY4HJFg7jO
— bill morgan (@Belisarius2020) September 13, 2023
He made the remark after Mike Selig of Willkie Farr & Gallagher LLP provided a legal analysis regarding the SEC’s recent settlement with SC2.
Ripple Truncates SEC Efforts to Label Altcoins Securities
It bears mentioning that the SEC has been mounting pressure on the crypto industry since 2017. As reported earlier, SEC Chair Gary Gensler claimed that Bitcoin is the only cryptocurrency that falls outside the commission’s regulatory purview, thus suggesting that other altcoins are securities.
The regulatory agency has already labeled over 60 crypto assets as securities in different lawsuits against crypto companies.
However, the SEC’s effort to label all altcoins as securities was truncated recently in its lawsuit against Ripple Labs. The Crypto Basic reported that a federal court ruled that XRP, the sixth-largest cryptocurrency by market cap, is not a security.
Although the SEC accepted the legal classification of XRP as a non-security, the commission is seeking to file an interlocutory appeal challenging the decisions on Ripple’s programmatic sales and other distributions.