Nine tokens – most of which traded at Coinbase (COIN) – were featured by the regulator in an insider-trading case against a former manager at the company. Many believe that maneuver has importance well beyond the enforcement action, because the cryptocurrency industry has been eager to settle the question of which digital assets may be regulated by the SEC as securities and which may be commodities regulated by the Commodity Futures Trading Commission (CFTC). The SEC appeared to be slowly answering that question token by token.
Now the regulator will have to defend the assertion in federal court that the nine tokens tied to the case should be considered securities, because lawyers for the ex-Coinbase employee, Ishan Wahi, filed an argument this week that the tokens weren’t securities and the agency shouldn’t be using one person’s enforcement action to decide “how major questions of law that loom over entire industries should be resolved.”
Source: Will the SEC Convince a Court It’s Right to Label These Tokens as Securities?