The United States Securities and Exchange Commission is rapidly shifting its stance on cryptocurrency

The United States Securities and Exchange Commission is rapidly shifting its stance on cryptocurrency, dropping cases and investigations against major companies

The United States Securities and Exchange Commission is rapidly shifting its stance on cryptocurrency. After opening cases and investigations against major companies like Coinbase (NASDAQ:COIN), OpenSea, Uniswap and Robinhood (NASDAQ:HOOD), among others, the SEC has now dropped these probes.

President Donald Trump has further cemented the legitimacy of the industry with his announcements about a strategic Bitcoin and/or crypto reserve.

While the industry is celebrating these developments, there are plenty of unresolved questions. Does the SEC dropping its investigations into OpenSea and YugaLabs really mean that NFTs are not securities?

Not really, says Yuriy Brisov of Digital & Analogue Partners, adding that it’s an oversimplification of a complex legal issue. He also notes that Judge Torres, in the Ripple case, wanted to be personally involved in the case, which might complicate matters further.

The good outcome of these investigations isn’t always a lawsuit. It could also result in an SEC report clarifying regulatory classifications — just as Ripple’s utility tokens were deemed securities in certain sales, the SEC might assert that NFTs and memecoins can also be securities under certain conditions, while DeFi platforms may be considered brokers or dealers under the Exchange Act of 1934.

Now, they just dropped charges and the crypto community is saying that NFTs cannot be securities. And the Uniswap case suggests that all DeFi platforms cannot be an exchange or broker dealer under the Exchange Act.

I would say that it’s the wrong message that the market receives: that they can do whatever. I don’t support this approach. It’s probably a good thing to let the new, innovative companies grow. But someone must, from time to time, investigate them and ask some questions, issue reports, and make recommendations.

Under Gary Gensler, the SEC was overdoing it. For instance, with Coinbase, they were strictly following all the KYC procedures. Coinbase actually invests a lot into following all the laws. So this battle with Coinbase, for me, was meaningless from the very beginning. But with OpenSea, with Uniswap, I wouldn’t say that it was meaningless but the results of these investigations, I cannot call them satisfactory at this point.

Given that US crypto laws influence other countries, are jurisdictions like Hong Kong, Singapore, and Dubai likely to see similar abrupt changes?

In places like Hong Kong, Singapore, and Dubai, such drastic regulatory U-turns are less likely. These jurisdictions have taken a more measured and structured approach to crypto regulation.

For example, Hong Kong’s Securities and Futures Commission has been methodical in its approach. When the SFC first introduced its crypto regulatory framework, it excluded riskier products like options trading. Only after the initial framework had been in place for some time did the SFC announce it would explore allowing options and leveraged trading. This phased approach ensures that riskier aspects of the ecosystem are introduced only after participants have been vetted and deemed sufficiently sophisticated.

This steady, incremental approach contrasts sharply with the SEC’s abrupt shifts. It also highlights the importance of building a regulatory framework that evolves based on experience and judicial input, rather than the personal views of those in power. In Hong Kong, Singapore, and Dubai, the focus is on creating a predictable and trustworthy environment for innovation, which is something the US could learn from.

Can crypto firms sue regulators if they believe regulatory actions have harmed their business?

In the US, you can sue anyone for anything, even if you don’t have a meritorious claim.

Nothing stops you from launching a lawsuit. This is why, in my line of work, what we do is we often have indemnification clauses that if a party were to be sued as a result of the other party’s actions, regardless if that suit has merit or not, that party that is sued still incurs legal costs simply just to make this go away or defend themselves. So the answer to the question is, they can absolutely sue. Whether or not they’re going to win is obviously a whole other thing.

Has the SEC’s approach to NFTs and its decision to drop the OpenSea investigation created more legal uncertainty around crypto laws?

Now, there is a general understanding for the market that NFTs cannot be securities. I don’t think that is a very good outcome of this investigation because NFTs obviously can be securities, and they can create certain risks regarding securities. Actually, the fact that the SEC was investigating OpenSea could have created this understanding, as we have with Ripple. Before the Ripple case, we didn’t know how to approach utility tokens. Now, we know that there are two types of tokens, those that are sold on exchanges and those that are sold to institutional investors. And the same token can be either a security or not.

We could have the same understanding regarding NFTs, that some NFTs are really collectibles and they’re not a part of securities legislation.

For instance, we did a project where we offered securities in the form of NFT in a real estate project,