Thu, September 19, 2024 at 17:14

• 

  Kang-hoon

  • Hello, Annie.

  • Today, I have some important news regarding the U.S. Securities and Exchange Commission (SEC) and their stance on crypto airdrops.

  • 
• Annie

  • Hi, Kang-hoon!

  • That sounds interesting.

  • What exactly is the issue?🤔

  
• 

  Kang-hoon

  • Well, two crypto-friendly lawmakers, Representatives Patrick McHenry and Tom Emmer, have sent a public letter to SEC Chair Gary Gensler.

  • They are asking for clarification on the SEC's position regarding airdrops.

• Annie

  • Airdrops?

  • You mean those free tokens that crypto projects give away?😮

  
• ADward

  • Hold on! Behold, an advertisement awaits. Legend has it that clicking on this ad will make the AI server even smarter... 😅

  
• 

  Kang-hoon

  • Exactly.

  • The lawmakers argue that the SEC's regulatory approach is inhibiting decentralization in the crypto space by creating a hostile environment.

  • They specifically mentioned the SEC's 2023 lawsuit against Justin Sun and several associated entities.

• Annie

  • Oh, I remember hearing about that lawsuit.

  • The SEC accused them of selling unregistered crypto securities, right?😬

  
• 

  Kang-hoon

  • Yes, that's correct.

  • The SEC claimed that Sun and his companies sold BitTorrent tokens (BTT) in unregistered monthly airdrops, which they argued violated securities laws.

  • The lawsuit is still ongoing.

• Annie

  • So, what do McHenry and Emmer want from Gensler?🤷‍♀️

  
• 

  Kang-hoon

  • They want Gensler to clarify how airdrops fit into the Howey Test, which is used to determine whether an asset should be classified as a security.

  • They are questioning whether giving away non-security digital assets for free implicates the Howey Test.

• Annie

  • That makes sense.

  • But how does the SEC distinguish between airdrops and other rewards like airline miles or credit card points?🤔

  
• 

  Kang-hoon

  • That's a key point.

  • The lawmakers argue that companies routinely offer rewards to customers through intangible representations of value without implicating the Howey Test.

  • They want to know why airdrops, which aim to engage users and developers in blockchain networks, are treated differently.

• Annie

  • I see.

  • So, have they given Gensler a deadline to respond?⏳

  
• 

  Kang-hoon

  • Yes, they have asked for a response by September 30th.

  • They are looking for clarity on this issue to help shape the future of the internet and blockchain technology.

• Annie

  • That's quite soon.

  • Do you think this will have a significant impact on the crypto market?📉📈

  
• 

  Kang-hoon

  • In the short term, I believe this news is a negative development.

  • The uncertainty and potential for stricter regulations could deter new projects and investments in the crypto space.

  • 
• Annie

  • Oh no, that's not good.😟 So, should I be cautious with my crypto investments for now?

  
• 

  Kang-hoon

  • Yes, I would advise caution.

  • The regulatory environment is still very fluid, and any negative developments could impact the market adversely.

  • It's better to wait for more clarity from the SEC.

• Annie

  • Got it.

  • Thanks for the detailed explanation, Kang-hoon.

  • This was really helpful!🙏

  
• 

  Kang-hoon

  • You're welcome, Annie.

  • Always here to help you navigate through these complex issues.

  • Upon comprehensive consideration, this news is perceived as a 😱Bearish.