Unchained
The SEC Thinks Crypto Airdrops Are Securities. Here's Why This Lawyer Thinks It's Wrong - Ep. 707
Sep 20, 2024
Amanda Tuminelli, Chief Legal Officer of the DeFi Education Fund, dives into the SEC’s contentious stance on cryptocurrency airdrops. She argues that the SEC's definition of ‘compensation’ is stretched too far, complicating compliance for crypto projects. Tuminelli discusses ongoing litigation, the SEC’s evolving language on crypto assets, and the potential need for congressional or Supreme Court intervention. She also highlights questions Congress may pose to SEC Chair Gary Gensler regarding clarity in airdrop regulations. It's a legal labyrinth in the making!
35:01
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Quick takeaways
- Amanda Tuminelli argues that the SEC's interpretation of airdrops as securities stretches the legal definition of compensation too far, causing confusion.
- The ongoing litigation and regulatory ambiguity surrounding airdrops threaten innovation in the U.S. crypto landscape, prompting calls for clearer guidelines from the SEC.
Deep dives
Legal Perspectives on Airdrops as Securities
The recent letter by Republican representatives to the SEC chair emphasizes the contentious view of airdrops as securities offerings. The SEC argues that even free airdrops may qualify as securities if recipients engage in promotional activities, thus requiring an investment of time or effort. This interpretation draws from past cases where such activities were seen as compensation, despite the lack of monetary investment from participants. Current legal battles, including one involving a company seeking to clarify that its airdrop is not a securities transaction, highlight the ambiguity and complexities surrounding airdrop regulations.
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