Attorney Jeremy Hogan gives Tether (USDT) and Binance Coin (BNB) an SEC danger rating with a 9 and 8.5/10 rating
It seems that in the near future, not only XRP but a number of other altcoins will also be entangled in the legal story with the SEC. In the opinion of Attorney Jeremy Hogan, there are about some top cryptocurrencies at risk on the SEC danger rating. And the two currently revealed names are Tether (USDT) and Binance Coin (BNB).
To clarify, the cryptocurrencies that Hogan mentioned are Bitcoin, Ethereum, Ethereum 2.0, Tether and Binance Coin. However, the story turned ludicrous when the SEC classified Bitcoin and Ethereum as commodities. Therefore, these two cryptocurrencies will not be subject to legal entanglement. But XRP has long been caught up in this lawsuit. Do you see the absurdity?
Attorney Jeremy Hogan: Tether (USDT) and Binance Coin (BNB) fall under the securities spotlight
Based on the analysis, Hogan cautions that both Tether and BNB are likely to be up-and-coming names in legal entanglement.
To determine violations of securities laws, the SEC relied on the Howey test to assess whether a transaction qualifies as an investment contract.
The “Howey Test” is an effective means of determining whether a financial instrument is an investment contract and security. It contains four elements:
- An investment of money
- In a common enterprise
- With a reasonable expectation of profits
- To be derived from the efforts of others
He said:
“Under the Howey Test, an investment contract exists if there is an investment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others.”
Hogan pointed out that his judgment is not to determine whether tokens will win or lose in a securities lawsuit. Instead, it concerns the chance of legal action by the SEC in his view.
Regarding Tether, Hogan briefly mentioned Tether’s $18.5 million settlement in February of this year with the New York Attorney General (NYAG). Bitfinex has paid a fine to end an investigation into allegations it tried to cover up a loss of $850 million. The NYAG also raised concerns about allegations that it was short of cash reserves to support Tether in circulation.
Hogan did not discuss how Tether stacks up against the Howey test criteria but gave the popular stablecoin a 9/10 danger rating.
Regarding Binance Coin (BNB), Hogan believes that BNB is a form of an investment of money. The 2017 Binance ICO also matched the description of an investment contract.
He added:
“Is there an investment of money? Yes, you buy the coins. And where did the coins come from? Well, Binance had a genuine Initial Coin Offering, an ICO, in 2017. This is the exact thing that Chairman Clayton and new SEC Chairman Gensler have basically said is an investment contract.”
Moreover, Binance’s operations are very centralized – something that has long been preoccupied with cryptocurrency experts. For example Binance’s buyback coin burn policy. This further increases their value, which is consistent with the story of profit expectations. He gave BNB an SEC danger rating of 8.5/10.
The lawsuit between the SEC and Ripple since the proceedings began last December has tired the entire cryptocurrency community. The U.S. The Securities and Exchange Commission accused Ripple of selling $1.3 billion in unregistered securities over eight years. The coverage has demonstrated his knowledge of the complex legal subtleties involved with securities law.
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