According to Ripple attorney John Deaton, the current SEC management could sue Elon Musk and classify the dog-themed meme coin as an unregistered security.
Deaton believes such an outcome would not be unreasonable under the current SEC administration.
Deaton Says SEC Can Sue Elon Musk On Twitter Only If He Allows DOGE Payments
The lawyer announced this in a tweet yesterday. The tweet followed the regulator’s insistence on regulating the crypto space through enforcement actions, as SEC chairman Gary Gensler insisted there was no need to create rules for the emerging market.
Here’s a thought:
if @elonmusk allowed for payments over @Twitter but ONLY allowed #DOGEwould he be at risk that the SEC would sue him claiming #DOGE is an unregistered security?
The answer should be: that’s a ridiculous thought. But with today’s malicious SEC, is it?
— John E Deaton (@JohnEDeaton1) January 31, 2023
According to Gensler, most cryptocurrencies, with the exception of Bitcoin, are securities and are therefore covered by current traditional finance rules.
For example, its lawsuit against Ripple argues that XRP will be a security regardless of how it is used. In particular, this stance is against the securities law, as has often been pointed out by Deaton, who represents thousands of XRP holders.
Most recently, the SEC took legal action against Gemini and Genesis Trading on the grounds that Gemini offered an unregistered security through the Earn program.
In particular, Deaton’s comments came after reports that the Twitter CEO is trying to add a payment system to the social media platform to increase revenues.
Not much is known about the proposed payment system, but reports indicate that the company has already applied for a license and is developing the software.
Reports unsurprisingly led to speculation that the meme coin would be integrated as part of the feature because of Musk’s love for DOGE. This speculation caused the token to spike as much as 10% yesterday.
*Not investment advice.
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