ADA, Cardano’s native crypto, is part of a list of 61 cryptos now classified as securities. A legal scholar thinks the reasons behind this SEC classification don’t hold water. Here is his analysis.
SEC case against Cardano weak?
Are the SEC’s accusations that Cardano’s ADA is a security legitimate and founded? Legal expert Bill Morgan doesn’t think so. In a recent post he published on Tweeter, the specialist delivers his analysis of the situation and the arguments that support it.
These are based on an analogy with the development of the smartphone market. This technology sector is unique in that its operators provide information on the characteristics of their products.
When they do this, Morgan explains, it’s basically to field improvements. A way for them to not only remain competitive, but above all to stimulate sales and with them numbers.
This practice is also common in the crypto industry. But the SEC, he notes, appears to treat efforts by crypto firms, like Cardano, to remain profitable and competitive differently. Doesn’t that suggest double standards for a public institution that is supposed to be fair in its treatment?
The SEC appears to be relying on public information shared by Cardano and its stakeholders Input Output (IOHK) and Emurgo. According to her, the information in question led users to believe that they invest in these entities. This, in order to take advantage of development efforts and an increase in value.
For Bill Morgan, what is like a call for investment is none other than adding functionality to Cardano. That said, its leader, Charles Hoskinson, can be confident. The SEC’s argument would not hold up in court.
Note that the SEC itself has not been able to come to a definitive conclusion on what a title really is. But this is another subject.
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