LCX Crypto News Highlights Monty Metzger’s Support Of Free-Market Crypto Supporters Wanting SEC Out Of Blockchain Regulatory Oversight

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Is the SEC attempt to assume regulatory oversight of the crypto market in the U.S. a good thing? This article presents a perspective on why this is not the case, what entity would be better suited to provide regulatory oversight, of at least Bitcoin and Ethereum, and how LCX’s CEO Monty Metzger is responding to the SEC attempt to classify the LCX Utility Token as a Financial Security.

U.S. Senators Introduce Legislation On Crypto Regulators

Senators Debbie Stabenow (D-Mich.) and John Boozman (R-Ark.) recently introduced legislation that would clearly define which regulators wield authority over two cornerstones of the cryptocurrency market—Bitcoin and Ethereum. Free-market advocates have reason to wholeheartedly support the proposal.

It would be fair to say that observers might be confused about the legislation’s effect, considering The Associated Press characterized it as lawmakers “who have run out of patience” with the industry’s “attempts to live out an unregulated, Libertarian, bank-free world.”

However, that characterization isn’t quite accurate. On the contrary, the proposal would make it clear that the two tokens fall under the jurisdiction of the Commodity Futures Trading Commission (CFTC). The move would implicitly remove authority from Securities and Exchange Commission (SEC) Chair Gary Gensler—a staunch ally to Senator Elizabeth Warren, a fellow Massachusetts Democrat.

Gensler has lamented on more than one occasion that he believes the industry is defined by “fraud, scams, and abuse,” a dour outlook that has contributed to heavy-handed and arguably unscrupulous tactics aimed at undermining cryptocurrency development. The latest example took place in July when the Justice Department indicted a Coinbase employee on allegations of insider trading. Gensler’s SEC quickly jumped on the department’s coattails, announcing a complaint against the employee for trading “securities”—implying that Coinbase had unlawfully allowed the public to trade cryptocurrencies involved in the case.

Never mind—as Coinbase pointed out—that its process for listing tokens is one “the SEC itself has reviewed.” Rather than pursuing authority through open legislative channels, the agency opted instead to make a subtle, rapid grab for power. “Instead of having a dialogue with us about the seven assets on our platform, the SEC jumped directly to litigation,” Coinbase noted.

Is The CFTC Taking A Stand?

CFTC Commissioner Caroline Pham used even stronger language, calling it “a striking example of regulation by enforcement” in a statement. “Major questions are best addressed through a transparent process that engages the public … pursuant to the Administrative Procedure Act,” she added. “Regulatory clarity comes from being out in the open, not in the dark.”

Read our related article: CFTC Vs SEC Crypto Senate Bill Brings LCX & Other Crypto Tokens Identified As Securities Relief?

What was the reason for the move? Disdain for unfettered free markets could be one answer. Another answer may be regulatory power and the cash that comes with it. Justifying the SEC’s 4,500 employees—and $2 billion budget—requires perpetually headline-grabbing work. And for those ready to retire from public service, a broader menu of regulatory activity means a wider range of job opportunities in the private sector.

Does it come as any surprise that it was Gensler who served as Hillary Clinton‘s chief financial officer during her 2016 run for the presidency? It was his oversight that led the campaign to a fine from the Federal Election Commission for misreporting expenses related to the Steele dossier.

But let’s move on from Gensler’s SEC for a moment. As of early August, Bitcoin and Ethereum’s combined value stood above $600 million, making them a significant feature of global markets. Therefore, even those who opt not to invest in cryptocurrency stand to be affected if they are subjected to the arbitrary whims of capricious regulators. That’s one reason the industry has voiced support for moving regulatory purview to the CFTC.

“We believe that coins like Ethereum require their own digital classification,” American Blockchain PAC CEO Adelle Nazarian told me in an interview. “To date, there is no framework that exists by the CFTC, Congress, Treasury Department, or the IRS. All of those need to come together to establish a mutual definition.”

At the same time, some with ground-level knowledge of the industry have been slow to speak up. One developer, who did not wish to be named, told me that was true in his case because he did not want to put a “target” on his back for the SEC.

The consequences, if they fail to pipe up, could prove worse. “Eventually, someone is going to knock on their door,” Rutgers Business School fintech professor Merav Ozair noted in an interview with a cryptocurrency website last month. “Look at what happens to a lot of those who say something like, ‘Try it and see,’ maybe they’ll come after us and maybe they don’t.’ Eventually, they come. They get fined millions of dollars and they get closed down. No one wants to be in that situation, so why not think ahead?”

They’re fearful that someone is going to knock on their door? It almost sounds like a story out of a Fyodor Dostoevsky novel about life in the Soviet Union. And it serves to illustrate why freedom-loving Americans should support moving regulatory authority—particularly over the emerging crypto market—away from the SEC.

LCX Reacts To SEC Filing

As one of the tokens identified by the SEC as a security, Monty Metzger, the CEO and founder of LCX, has been particularly vocal of his condemnation of the SEC’s ruling. He has taken to Twitter and defined an international basis of support for his position on LCX being unequivocally NOT A SECURITY. An excerpt of some of Monty Metzger comments on Twitter include:

The SEC has filed a lawsuit against an ex-Coinbase employee and two other named individuals in relation to insider trading. The person was in charge of listings and shared confidential information with the two other individuals who then did trades and bought these tokens. The lawsuit also alleges the following tokens are securities: AMP, RLY, DDX, XYO, RGT, POWR, DFX, KROM and LCX. LCX token has been issued in a compliant manner. Renowned law firms in Liechtenstein, Singapore and the US confirmed that LCX token is classified as a utility. Some of the Legal Opinion Quotes include:

  • US: “the SEC and individual states likely would not consider the LCX Token to be a security.”
  • Singapore: “LCX Tokens would not constitute capital markets products under the SFA.”
  • Liechtenstein: “LCX token are classified as utility tokens according to TVTG”

The LCX Token ($LCX) is a utility token issued by LCX AG. As such, the LCX Token is a utility Token – like a voucher – which may be used to pay all fees associated with the services offered by LCX AG, e.g. trading fees at LCX Exchange, fees for LCX subscriptions; and other fees.

Holding LCX Tokens does not grant the holder any equity in LCX’s company, nor does it entitle the holder to receive any distributions, dividends, transfers, profits, or allocations. LCX did not conduct a sale of LCX Tokens before any code has been deployed. LCX conducted a sale of LCX Tokens when the protocol is operational and the LCX Terminal was fully functional.

The LCX Token is an ERC-20 token and the network for Ethereum is operational.

LCX Tokens holders will NOT have:

  1. ownership or equity interest in a legal entity;
  2. entitlement to a share of profits and/or losses, or assets and/or liabilities;
  3. status as a creditor or lender; or
  4. a right to repayment of purchase price and/or payment of interest.

Read our related article: Is Crypto A Security SEC? LCX Says Token Not, Monty Metzger Challenges Enforcement Action Via Twitter

Originally published via this site

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About LCXwire 

LCXwire is dedicated to providing you the latest news about the products and services of the Liechtenstein Cryptoassets Exchange, the LCX token, and information relevant to the Centralized and Decentralized Finance (CeFi and DeFi) Exchanges. Our goal at LCXwire is to provide you with the best, most relevant, and exclusive information about the crypto industry. 

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