New Jersey Bill 5747: Classifying Crypto as Securities
A bill introduced in the U.S. state of New Jersey aims to categorize all cryptocurrencies issued and sold directly to institutional investors as securities. Representative Herbert Conway sponsored the bill, which states that virtual currencies issued and sold to institutional investors will fall under the state’s “Uniform Securities Law” and related regulations. The bill is currently under review by the Assembly Financial Institutions and Insurance Committee.
Regulatory Uncertainty at the Federal Level
There is still uncertainty regarding the regulatory status of cryptocurrencies at the federal level, with no clear guidance on which tokens are considered securities. SEC Chairman Gary Gensler has expressed that most crypto tokens, excluding Bitcoin (BTC), are securities. However, he has not explicitly commented on Ether (ETH). A recent court ruling in the SEC v. Ripple case determined that XRP is not a security as an individual asset.
SEC’s Identification of Securities Tokens
The SEC has classified several crypto tokens as securities in lawsuits against different crypto firms. These tokens include ADA, AXS, ALGO, ATOM, BNB, BUSD, CHZ, COTI, DASH, FIL, FLOW, ICP, MANA, MATIC, NEAR, NEXO, OMG, SAND, SOL, TKN, and VGX.
Hot Take: New Jersey Moves to Classify Crypto as Securities
A bill introduced in New Jersey seeks to define cryptocurrencies issued and sold to institutional investors as securities. This move aligns with the perspective of SEC Chairman Gary Gensler, who views most crypto tokens as securities. However, the regulatory status of cryptocurrencies at the federal level remains uncertain. As the bill progresses through the review process, it will be interesting to see how it impacts the classification of virtual currencies in the state and potentially sets a precedent for other jurisdictions.
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