Prominent attorney Jeremy Hogan gave his legal assessment of major cryptocurrencies. Specifically, naming Bitcoin, Ethereum, Tether, and Binance Coin as at risk in the ‘SEC Hazard Rating’.
To clarify, Jeremy Hogan has been covering the SEC’s lawsuit against Ripple since the proceedings began. In fact, the United States Securities and Exchange commission (SEC) alleges that Ripple sold $ 1.3 million in unregistered securities over eight years.
Jeremy Hogan: “Likely Options for SEC Lawsuit”
Based on analysis, Hogan cautions that, in his opinion, both Tether and BNB are likely candidates for legal action. By the way, in his last video on his YouTube channel “Legal Briefs” he spoke about his opinion on the possibility of the SEC considering BNB, USDT and ETH 2.0 as a security.
To better understand, the SEC judges whether an asset is a security through the well-known Howey test. This test classifies an asset as a security when a person invests money in a joint venture and expects benefits from the efforts of a third party.
What did he say about Bitcoin and Ethereum?
In fact, according to Jeremy Hogan, Bitcoin is the least likely to be labeled as a security. But, if the SEC believes that there are joint ventures that manipulate the price of Bitcoin, it could go for the most important cryptocurrency. By the way, he gave it a hazard rating of 2/10.
«There is an argument against Bitcoin, but it is very weak. I wouldn’t lose sleep over this».
Referring to Ethereum, he indicated that it raised money from investors before it went on the market in a pre-sale. This makes it more likely that you will fall under the SEC’s purview for a securities violation. Giving it a 4/10 rating.
It is worth mentioning that former SEC Director William Hinman once stated that only Ethereum and Bitcoin are exempt from being classified as securities. However, according to Hogan, this will not matter in the least if the SEC decides to move to Ethereum.
Regarding Ethereum 2.0, Hogan believes that because ETH is switching to Proof-of-Stake, this makes it even more likely that it will be classified as a security. The rating was 6/10.
«It definitely looks like the SEC could see a promotion and improvement of the network, by a semi-centralized entity with the launch of ETH2».
What was the rating of Tether and Binance Coin?
According to Jeremy Hogan, Tether is one of the most controversial coins on the market. And, it is the one that is most likely to be attacked by the SEC.
«I’d say that gives Tether a 9 out of 10 on the Hazard Rating. But you are not the owner, and you probably never will be and so I guess you don’t care too much».
In parallel, in breaking down the BNB situation, Hogan notes that BNB tokens form a “money investment.” He added that the Binance ICO in 2017 also matches the description of an investment contract.
Furthermore, Hogan said that the exchange has a great influence on the performance and profitability of the BNB token. He even repurchases some of the BNB and burns it, just for the BNB to have more value. For these reasons, “we have a strong argument that Binance Coin is a security.” And, it gave BNB an SEC Hazard Rating of 8.5 / 10.
In closing, Jeremy Hogan noted that his assessment was not a determination of whether tokens would win or lose in a securities lawsuit. Instead, it relates to the chances of the SEC taking legal action.
I say goodbye with this phrase from Thomas Szasz: «Classification is a social act that requires the participation of at least three types of people: the classifier, the classified and a public that accepts or rejects the classification».