Crypto Leader Riccardo Spagni Says SEC Guidelines Won’t Make Any impact on Monero (XMR)
Riccardo Spagni, the lead maintainer of Monero believes the SEC guidelines won't really make an impact on the Monero. His response was for the question whether the guidelines set by SEC which deems Digital token as Security. During his recent interview, he spoke about whether Monero can be deemed as security.
The SEC recently released a framework to analyze whether an asset can be classified as security or not. The framework included a Howey Test which can be applied on any form of tokens, assets or even contracts to determine whether they fall under the security bracket or an independent entity. The Howey Test looks for three factors to distinguish whether the subject in question can be deemed as security. The first factor taken into consideration is an investment of money; the second is the expectation of profit, and the third is a common enterprise.
The interviewer asked Spagni that the commission has stated that any project with enough decentralization and an open source protocol cannot be deemed as security and Bitcoin & Ethereum falls perfectly in that category. The host continued to ask whether Monero also falls in the same category since it also possesses the same qualities and the project is not controlled by a single person or authority.
Spagni responded that the SEC guidelines do not really matter as Monero never had a pre-sale just like Bitcoin. Another factor that makes Monero quite similar to Bitcoin is that Miners are responsible for every Monero token that has been produced since then, it has not been created out of thin air and that definitely makes it an entity rather than security. He explained,
“Monero can’t possibly be security because security requires a central issuer to have issued at some of the tokens or whatever upfront and sell them to people”
Spagni went on to explain that no one had the access to XMR token before its genesis block was mined, and its circulation supply has since then followed a “mathematically-bound emission curve.”
“there was no way to buy Monero before the Genesis block and from the Genesis block, it followed the mathematically-bound emission curve and there was no possible way for anyone to do, sort of, premine anything that could be sold to investors. So that makes things massively different […]”
After months of delays and impending requests, SEC has finally released a set of guidelines to determine which digital assets can be called as an independent entity and which falls under the category of security. The Howey test has finally made it possible to distinguish between the two. Earlier SEC only used to clarify when prompted to question over the status of security fro tokens.
Recently it stated that any crypto-token with a certain extent of decentralization and no control over its consensus does not fall under the category of security. Monero posses all the characteristics of Bitcoin in its operation and consensus and that makes Spagni believe that SEC guidelines do not matter much as they already know that they are an entity rather than security.