The founder and CEO of Quantum Economics Mati Greenspan is warning that the U.S. Securities and Exchange Commission (SEC) is jeopardizing the future of cryptocurrencies by waging battle with decentralized content sharing and publishing protocol LBRY.
In a newsletter, Greenspan says that the SEC’s move to press an illegal securities offering charge against LBRY could “kill” the budding crypto sector especially if the courts rule against the blockchain-based publishing platform.
“Should the court side against LBRY, it would literally put the future of all cryptocurrencies, including Bitcoin and Ether, in question.”
The Quantum Economics CEO argues that the SEC is taking too liberal an interpretation of the Howey Test in the case against LBRY, whose native token LBRY Credits (LBC) is mineable and is used as a means of payment as well as a way of incentivizing participation and contribution.
The Howey Test originates from a 1946 U.S. Supreme Court case and states that any scheme, contract or transaction constitutes a security offering if and when participants put their ‘’money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others.”
“To state that LBRY credits, which are the epitome of multifaceted programmable money, are indistinguishable from your traditional investment vehicles, is an extremely thin stretch of the Howey Test that the SEC continues to use as their primary weapon in their war on digital assets.”
Greenspan further warns that only stablecoins could survive regulation if LBRY loses in court.
“A negative ruling here could make it easier for them to kill off any project which utilizes crypto tokens. DeFi, non-fungible tokens (NFTs), smart contracts, and just about everything except possibly stablecoins would potentially be on the chopping block.”Don't Miss a Beat – Subscribe to get crypto email alerts delivered directly to your inbox
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