Michael Saylor on Why Altcoins (Specifically Ethereum) Are "Unregistered Securities" and Should Be Shut Down by the US SEC


Recent comments about altcoins by Michael Saylor, co-founder and CEO of business intelligence software firm MicroStrategy Inc (Nasdaq: MSTR ), make US SEC director Gary Gensler look pretty crypto-friendly by comparison. 

 This is because while Gesler has repeatedly stated that Bitcoin is definitely a commodity while most altcoins are unregistered securities, Saylor seems to believe that ALL altcoins, especially Ethereum ($ETH), are unregistered securities. 

 It is worth remembering that on August 11, 2020, MicroStrategy announced in a press release that it "purchased 21,454 bitcoins for a total purchase price of $250 million" to be used as "the government's main reserve fund". 

 Saylor said at the time: 
 "Our decision to invest in Bitcoin was driven in part by macro factors affecting the economic and business environment, which we believe create long-term risks to our company's financial program - risks that should be proactively addressed." 
 Since then, MicroStrategy continued to collect Bitcoin, and its former CEO became one of Bitcoin's most vocal advocates.

 MicroStrategy's latest purchase of $BTC, tweeted by Saylor on September 20, 2022, means the company now owns about 130,000 bitcoins, "acquired for ~$3.98 billion at an average price of ~$30,639 per bitcoin .

On  December 6, 2022, in an interview with entrepreneur Patrick Bet-David ("PBD") in episode 212 of the PBD podcast, Saylor was asked what he thought about Ripple (or rather, XRP). 

 Saylor, who seems to be confused about the difference between Ripple,  a FinTech company specializing in cross-border payment solutions, and XRP,  the original token of the digital asset XRP Ledger (XRPL), replied: 

 "Ripple is an unregistered security. ... Is company. The company owns some of them. They sell it to the public to the public, but they never took the company public, not public, right? Thus, the SEC's position "is not even an unregistered security." It's a crypto token, right? 
 Just like Ethereum is an unregistered security. It is run by some people from the Ethereum Foundation and Consensys... Same as FTT. Just like Solana. They are all unregistered securities…” 
 PBD then asked Saylor if all altcoins are unregistered securities, why is the SEC going after $XRP and not $ETH. 

 Saylor replied: 
 "I think the best thing in the world would be for the SEC to shut it down pretty much completely. It's all unethical, right? I mean Bitcoin's position would be that Bitcoin is an ethical commodity .All these other altcoins are .unregistered securities. They are all just stock tokens issued by a company for listing and are doing securities scams, including of course Ethereum. Especially Ethereum. 

 "You know, Ethereum currently has 20 billion dollars of ETH tokens that are locked  in interest, and some people can give it  to you or take it back. Now isn't that the definition of interest? When a bank took 20 billion dollars of your money, they froze the window and said, "You can get your money back someday, it could be in  2024,we're not sure, we'll just  keep it, we can actually pay you interest. this, we can take everything, we can cut it. 

 "That's the definition of  security, isn't it? It's an investment of money in a joint venture based on the efforts of others and the expectation of profit. The thing is, if you want to disguise an asset as a commodity, you can't depend on four, engineer, company or CEO.If a person can make a decision, it is not a commodity.

November 11, 2022 In an interview with CNBC's "Squawk on the Street," Saylor had this to say about the fallout from the  FTX crash: 

 "I think this week highlights both the virtues of Bitcoin and the fragility of the crypto ecosystem.Bitcoin.is a commodity you can get without keeping an issuer if centralized token trading on an unregistered exchange explodes this week. I think  Bitcoiners have been predicting this for a long time. On behalf of all  bitcoiners, we feel  trapped in a bad relationship with crypto and  want to get out... 

 "I think the industry needs to grow  and  regulators are coming into this space. And  the world wants  digital assets and digital assets and digital securities , but there is no way to register a digital security. There is no clear guideline or road map to define digital assets. The world wants a trillion dollars of digital currency as a stable coin of the US dollar... 

 "And so I think  the recent regulatory intervention  has been  negative, like enforcement, but the market is waiting for the regulators to say this is how you register. digital currency, this is how you register a digital security or a digital asset "... 

 "And instead of saying that all  crypto exchanges must register, we must register crypto exchanges  because the future of the industry is to trade registered digital assets  on regulated. exchanges where everyone has the investment protection they need and  investors understand the difference between Bitcoin on a stablecoin and a security token… 

 “I think that definitely goes to the strength  of the regulators. It accelerates their intervention… And there's regressive regulation that says you can't really do anything, and it shrinks the industry… but there's progressive regulation that says “so you can register a digital security, a digital currency,  digital token and  digital exchange."

 "If there's progressive regulation,  I don't think you'll see 20,000 signs, you'll see dozens, but there are properly registered signs. The industry is growing much faster. And finally we're moving from the entrepreneurial phase where it was the wild west to the high seas where everything becomes institutionalized to  digital to the active stage... and we all just  grow  and the world benefits.

And on  November 22, 2022, Saylor responded to a book published on the NBC News website on November 21, 2022 (by  Joshua Hendrickson, associate professor of economics at the University of Mississippi)  about how Bitcoin can get a bad name because of the machinations of bad actors in the crypto industry. This article said: 

 “This history shows that what is commonly known as crypto is distinctly different from both the cryptopunk vision that led to the creation of Bitcoin and  the evolution of Bitcoin itself and its environment over the last decade .Although Bitcoin was created as a censorship.A resilient and reliable digital currency, crypto has become a space dominated by get-rich-quick schemes.Whatever this crypto industry is, most bitcoiners and bitcoiners want no part of it.

 This prompted the former CEO of MicroStrategy  to send the following tweet to his 2.8 million followers

Source: https://www.cryptoglobe.com/latest/2022/12/michael-saylor-on-why-altcoins-especially-ethereum-are-unregistered-securities-and-should-be-shut-down-by-u-s-sec/

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