The direct application of decades-old securities laws could result in the classification of certain tokens as securities, Bernstein said in a research report on Monday. The U.S. Securities and Exchange Commission’s (SEC) lawsuits against crypto exchanges Binance and Coinbase (COIN) are at the heart of the question of whether crypto tokens are securities or commodities.
The SEC’s lawsuits against Binance and Coinbase have raised the issue of whether countries should use securities laws framed decades ago, without taking into account blockchain networks’ aim to transform the decades-old financial and securities market systems. Bernstein believes this is splitting the world into jurisdictions, with some countries taking progressive steps to gain an advantage and build crypto hubs.
The report from Bernstein also noted that the view that all tokens other than bitcoin (BTC) are securities does not leave any room for blockchain networks to attain decentralization over time, and for tokens to have functional utility within the network.
The U.S. is currently dealing with regulatory uncertainty, while the U.K., Europe, Hong Kong, Singapore and the Middle East are attempting to attract talent and capital by creating crypto hubs.