How One Crypto Is Avoiding SEC Regulation | The Motley Fool

Right now, cryptos have two basic options when it comes to SEC regulation, and neither of them is very attractive. The first option is to stand and fight, which is what XRP (XRP 0.83%) did back in 2020. The SEC insisted that XRP was a “security,” and XRP insisted it was a “cryptocurrency,” and that led to a huge legal battle that has now raged on for nearly two years now. This legal battle has taken a massive toll on XRP’s future prospects, and it’s hard to see other cryptos viewing this as a desirable course of action.

The second option, of course, is to accept whatever penalty the SEC decides to enforce. You can think of this as the Kim Kardashian strategy. She admitted no wrongdoing, paid a huge penalty, and agreed to all of the SEC’s demands. While the SEC has primarily focused on high-profile individuals and entities, what if you’re a tiny crypto that gets hit with an SEC enforcement action? That might pose an existential risk. So this is not a very desirable course of action, either.

That’s why I find the Polkadot approach so interesting. Instead of fighting the SEC, Polkadot decided to engage in constructive dialogue with the SEC. At each step of the way, says Polkadot, it listened to the SEC’s input and adapted its token so it matches what the SEC is looking for. After three years, Polkadot thinks it has done everything right and is now going public with its new identity as software.

Source: How One Crypto Is Avoiding SEC Regulation | The Motley Fool