Chia Network CEO Gene Hoffman argued that the XCH token is not a security, however, the company is working to register with the U.S. Securities and Exchange Commission (SEC).
As Bitcoin Magazine reported, SEC Chairman Gary Gensler said on Feb. 25 that “everything other than Bitcoin is a security.” He believes that, with the exception of Bitcoin, every crypto-token has a project team dedicated to promoting and attracting investors.
According to the Howey test, a token is considered a security if there is a “monetary investment in a common business with a reasonable expectation that others will be rewarded for their efforts.”
In this regard, Chia Network CEO Gene Hoffman stated that Chia’s native token “XCH” is not a security. He believes that XCH has not yet been publicly offered — a requirement for classifying securities based on the Howey test.
Hoffman added that the company plans to legalize the Chia stake by registering it with the SEC.
However, former Ripple developer Matt Hamilton said that the equity registration did not prevent the SEC from pursuing Ripple.
Hoffman explained that Chia’s case is different from Ripple’s because Ripple sold XRP without registering it.
“Unregistered token sales can convert tokens into securities. So don’t sell them until you register.”
Hoffman added that he wouldn’t be surprised if Ripple loses the case with the SEC because XRP was sold without registration.
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According to Cryptoslate