If the US Securities Exchange Commission (SEC) decided to go after Bitcoin like it’s doing to Ripple, Bitcoin would fall just as quickly as Ripple’s XRP has in the last couple of days, according to renowned Bitcoin critic and gold crusader Peter Schiff.
“What happens to the price of #Bitcoin if the sec alleges that it is a security?”
After close to three years of indecision, the US SEC finally went after Ripple last week for conducting illegal securities token sales with XRP. At the time of the announcement, XRP was in the midst of a long-overdue rally aiming to reach $1 and beyond.
“Ripple just rippled below 20 cents. It traded above 60% cents earlier this month. Almost 70% of its market cap gets erased in less than a month based solely on the SEC’s allegations that it is a security.”
Ripple’s woes started immediately after the lawsuit with mass liquidations followed by delisting by major exchanges including Coinbase, which plans to suspend XRP trading in January 2020.
The shocking news came a day after Ripple’s CEO Brad Garlinghouse warned that the SEC was preparing to sue Ripple as part of its agenda to sabotage crypto innovation in the US through its outgoing chair Jay Clayton.
Bitcoin is a Commodity
Since 2015, Bitcoin has been classified as a commodity by the Commodities Futures Trading Commission (CFTC).
In 2019, CFTC’s Chair Heath Tarbert affirmed that Ether too would be regulated as a commodity just like Bitcoin which was already recognized as a commodity. The SEC had been unclear before 2019 about Bitcoin and Ethereum’s classification statuses.
Additionally, according to the SEC’s Howey Test used to classify securities, Bitcoin, in particular, does not qualify to be a security. Unlike XRP and a vast majority of other security tokens, Bitcoin does not have a centralized control structure. XRP is pre-mined, controlled by a firm, and offered to investors in token sales, exactly like a security.
But according to Schiff, the SEC can change its mind anytime and consider bitcoin as a security and have enough grounds to go after it.
“All the SEC has to allege is that people buy #Bitcoin in anticipation of selling it for a profit and that others profit from their efforts to help generate profits for all Bitcoin Owners.”
In Bitcoin’s defense, Blockstack Co-founder and Bitcoin network developer Muneeb said that the rules are already clear and in favor of Bitcoin based on fundamentals.
“That’s not now securities regulations work…I’d suggest brushing on the Howey Analysis or reading SEC statements that state Bitcoin is not a security.”
