SEC Claims Algorand And Other Tokens Are Securities In Lawsuit

By Kevin • April 20, 2023 10:31 am • Comments

The SEC has initiated a lawsuit against the crypto exchange Bittrex last Monday based on the accusation that Bittrex had failed to register with the SEC as an exchange.

The specific regulation that the SEC is using for this lawsuit is the Securities Exchange Act of 1934.

Of course, in order for this act to actually be violated, Bittrex would have had to dealt with securities in some shape of form and it turns out that the SEC is defining several digital assets such as Algorand (ALGO) as securities.

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In fact, not only did the SEC define Algorand as a security, it had defined a total of6 crypto tokens to be considered securities as well.

This includes OMG Network (OMG), Dash (DASH), Monolith (TKN), Naga (NGC), Real Estate Protocol (IHT), and Algorand (ALGO).

DeCrypto.co reports:

The agency even says there will likely be more, describing the lineup as a “non-exhaustive list.”

Of the tokens included in the lawsuit, Algorand is by far the largest by market capitalization, with a total value of around $1.6 billion, according to CoinGecko. Over the past day, the token has fallen 4% to $0.22 as of this writing.

Algorand did not respond immediately to requests for comment from Decrypt.

Crypto Twitter zeroed in on the connection between Gensler and Algorand following the Bittrex lawsuit’s announcement, where Gensler previously called the network “great technology” that could support a ride-sharing service like Uber.

This new lawsuit and new classification of Algorand might surprise some investors due to the fact that Gensler had previously called Algorand “great technology”.

However, it seems that Gensler and the SEC are still following an aggressive anti-crypto agenda that may have been caused by the FTX collapse.

Of course, many believe that the SEC already had such an agenda in mind and just needed an excuse such as the FTX collapse in order to justify its enforcement actions.

It is now important to see if this will affect any other crypto exchanges within the US as there may be other platforms that also offer these tokens.

If so, there is the potential that the SEC will go after other platforms besides Bittrex in the future.

CoinTelegraph reports:

A four-year-old video of United States Securities and Exchange Commission Chair Gary Genser giving praise to smart contract platform Algorand is circulating on Twitter following the SEC declaring that ALGO is an unregistered security.

In the video, Gensler referred to Algorand as a “great technology” while he was contemplating whether a “high performance” smart contract network would be capable of integrating an Uber or Lyft-like application on its platform.

ALGO is one of six tokens that Gensler claimed was an unregistered security in the SEC’s lawsuit against crypto trading platform Bittrex on April 17 that took issue with the Algorand Foundation’s initial coin offering (ICO) of ALGO in June 2019.

Cryptocurrency researcher Mason Versluis was one of the first to highlight the video in an April 17 tweet criticizing Gensler for “shilling” ALGO, with others calling out the SEC chair for his apparent hypocrisy.

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