Key takeaways
Why the pushback against former SEC executives?
They corrected the misconception that cryptocurrencies have clear rules even in 2017.
What is the status of token buybacks?
Although they result in value accumulation for token holders, at the time of writing, there is no official classification for token buybacks or token burns.
Former SEC Chief of Staff Armanda Fisher has sparked some controversy following her claims about the state of cryptocurrency buybacks.
According to the CEO, buybacks via DAOs (decentralized autonomous organizations) like com.uniswap [UNI] It could be Considered securities transactions, citing 2017 SEC guidance.
she He added,
“FYI: The cryptocurrency market structure legislation contemplated by Congress and generally supported by major crypto players will not allow dividends/buybacks.”
However, cryptocurrency lawyers, including former US Senate candidate John Deaton, have criticized its claims. Deaton noted that the SEC’s 2017 guidance was followed by 57 enforcement actions.
However, clearer guidance was issued in 2019 by former President Jay Clayton and more recently by the Paul Atkins regime. These indicate that most tokens are not securities.
Deaton too He pointed out That Amanda Fisher Biden advised the SEC to file a lawsuit against Ripple Labs, but XRP was finally cleared as non-security. This was reinforced by Judge Analisa Torres.
He added,
“And this is my response to Amanda, Gary Gensler, Jorge Tenrero, and the rest of the old crew at the SEC: Shame on you… take the loss with a grain of salt.”
What’s next for token buybacks?
All cryptocurrency enforcement actions taken by the SEC under Biden have been rolled back under the Trump administration. The secondary sale of XRP to institutional investors was only found to be a securities transaction, but the token was insecure.
Which raises the question – are token buybacks actually a securities transaction as Fisher claims?
Excess fluid [HYPE], Bumpphone [PUMP], ghost [AAVE], Lido [LDO]And more recently Uniswap [UNI] Token buybacks have been doubled to enhance value accumulation for token holders.
Whether the “accumulated value of token holders” constitutes a securities transaction remains to be determined by the regulator. At the time of writing, there is no official guidance on this from the SEC.
In fact, Hayden Adams, CEO of Uniswap, male The buyback move was only made due to the current pro-crypto SEC regime.
Other cryptocurrency lawyers, including former Uniswap CIO Marvin Ammori, have also criticized Fisher’s stance. Ammuri Sarcastically,
“If the law is so clear, why has the SEC lost so many cases in court?”
Source: X
Overall, the SEC’s treatment of crypto tokens has evolved since 2017. Some of the instructions are about to be codified into law through the Market Structure Bill.
However, only formal regulatory guidance on token buybacks can clarify whether they represent securities transactions or not.
