As the Securities and Exchange Commission is attempting to define which cryptocurrencies could be classified as securities, Gene Hoffman, CCO of blockchain project Chia coin shared his point of view to clear up some of that confusion in recent tweets.
Hoffman specifically addressed Bitcoin (BTC), Litecoin (LTC), Dogecoin (DOGE), and XChange Coin (XCH), stating they are not securities.
He then went on to mention Ethereum (ETH), XRP, FTX Token (FTT), Solana (SOL), Avalanche (AVAX), and Cardano (ADA) coins, claiming that all of these cryptocurrencies have "always" been securities.Beyond attempting to classify different coins as either non-securities or securities, Hoffman, a seasoned tech executive, also explained that projects should not rely on selling their tokens or coins to investors in order to raise funds legally in the US. Instead, there are well-known ways to do so without putting potential investors at risk.
As reported by U.Today, Hoffman also recently predicted that the SEC would win this legal battle against Ripple. According to him, a federal judge will eventually conclude that XRP is a security.
While cryptocurrencies certainly have characteristics of securities, it is important to note that not all cryptocurrencies are necessarily securities.
Bitcoin specifically is generally considered to be decentralised and non-security; meaning it does not provide investors with an ownership share in a project or portion of profits made by the project’s venture. However, as reported by U.Today, John Reed Stark, former chief of the Securities and Exchange Commission's Office of Internet Enforcement, recently suggested the the flagship cryptocurrency should also be classified as a security.