The US Securities and Exchange Commission (SEC) may take legal action against Elon Musk if he decides to accept only DOGE payments on Twitter, says attorney John Deaton.
According to reports, Twitter is seeking legal approval for a new payment system. which will initially only support fiat currencies but will ultimately expand to include support for cryptocurrencies.
Deaton believes that the regulator’s current management might sue the billionaire and label DOGE, a meme coin with a dog theme, as an unregistered security.
Here’s a thought:
If @elonmusk allowed for payments over @Twitter but ONLY allowed #DOGE, would 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
Deaton’s assertions come on the heels of mounting evidence of the regulator’s stance on policing the cryptocurrency industry through enforcement actions, despite Gary Gensler, the US SEC chair, insisting that rules shouldn’t be made for the new market.
In Gensler’s opinion, except for Bitcoin, most cryptocurrencies are securities and, as such, are governed by the laws of conventional finance. Additionally, analysts and participants in the industry are concerned about the SEC’s claims in its enforcement cases against cryptocurrency entities.
Although anything can be packaged as an investment contract or an investment in a common enterprise, Deaton argues that doing so does not transform the underlying object into a security, noting the SEC’s recent legal action against Genesis Trading and Gemini for selling an unregistered investment through Gemini’s Earn program.
The issue has garnered attention for several reasons, including the fact that the SEC was aware of the product for over a year and took no action, yet forbade Coinbase from launching a similar product without providing any justification.
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