Ripple CTO David Schwartz commented on the lawsuit filed by the US regulator SEC against Bittrex. The cryptocurrency exchange is under scrutiny for alleged breaches of investor protection. The point that Schwartz criticized was on 6 altcoins that qualify as securities within the scope of the lawsuit.
Ripple CTO talks about SEC’s ‘securities’ decision
cryptocoin.com As we reported, Bittrex was sued for operating unregistered securities under US law. The SEC has sued crypto exchange Bittrex and its founder, William Shihara. The lawsuit qualifies as securities OMG Network (OMG), Dash (DASH), Algorand (ALGO), Monolith (TKN), NAGA (NGC), and IHT Real Estate Protocol (IHT) traded on Bittrex.
Referring to the lawsuit, Schwartz claims, “Investors of the SEC, DASH, ALGO, OMG, TKN, NGC and IHT have a reasonable expectation of profit!” said. He said that those who invest in these altcoins “expect a reasonable profit” and jokingly call it “investment advice”.
SEC-Bittrex lawsuit
On April 17, the SEC filed a lawsuit accusing Bittrex and its former chairman, William Shihara, of operating an unregistered exchange. According to the press release, for the past eight years at least since 2014, Bittrex has given its customers the opportunity to invest in tokens that are considered unregistered securities.
The SEC’s complaint lists DASH, ALGO, OMG, TKN, NGC, and IHT. The regulator claims that altcoin investors “expect reasonable profits,” meaning that coins should be considered securities under US law. In particular, DASH investors were allegedly operating under the assumption that the growth and development of the Dash Blockchain will increase the value of the tokens.
According to the SEC’s claim, the Algorand team followed a similar strategy by raising the token and promising growth opportunities to its investors. In the complaint, “Algorand Foundation, while promoting the sale of ALGO, attributed its potential growth to the potential demand for ALGO itself and its commitment to maintain a price base for ALGO.”
Meanwhile, the SEC has yet to file charges against any of the DASH, ALGO, OMG, TKN, NGC, and IHT teams.
The latest lawsuit is not the first of its kind: Listed on Ripple and Coinbase
This isn’t the first time the SEC has chosen to include securities claims in lawsuits against individuals and firms. The US regulator said nine cryptocurrencies are securities in its 2022 lawsuit against former Coinbase employees for alleged insider trading.
Another altcoin project alleged to be a security, Ripple, was sued by the SEC in 2020. The lawsuit was filed on December 22, 2020. The SEC has accused the company of illegally selling securities since 2013, claiming that Ripple’s XRP token is a security. It is stated that Ripple and its executives have raised millions of dollars from selling XRP without registration and enabling investors to invest risk-free.
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