Chia CEO Faults Gary Gensler’s Blanket Crypto Classification

The SEC chairman said all digital assets, except Bitcoin will be classified as securities.
Chia CEO, Gene Hoffman said his company plans to register the XCH token as an equity.
According to Hoffman, Chia has never sold any of the XCH it owns.

Chia CEO Gene Hoffman has faulted the classification of all cryptocurrencies, except Bitcoin, as securities by Gary Gensler, Chairperson of the Securities and Exchange Commission (SEC) of the United States. Gensler made the classification while answering questions about his agency, including his involvement with Sam Bankman-Fried (SBF), the former chief of the defunct exchange FTX.

According to a report, Gensler maintained his steadfastness over classifying digital assets, even while in close range with stakeholders trying to lobby for a change in regulation. It was reported that he discouraged SBF and others from going on with their proposal for a more relaxed regulatory atmosphere even before they went deep into their presentation.

Gensler’s model of classifying cryptocurrency became a subject of debate for some of the well-known stakeholders in the industry. In a Twitter thread, the Canada-based Bitcoin miner, with the Twitter identity AaronGu, engaged the CEO of Chia, Gene Hoffman, with what he thinks about Gensler’s latest comment.

No, the SEC is saying that when Ripple sold XRP without a registration statement that was either an investment contract or a securities scheme – both clearly covered by the ‘33 and ‘34 Act. I wouldn’t be surprised if they prevail that after that sin, 2ndry sales remain securities
— Gene Hoffman hoffmang.xch 🌱 (@hoffmang) February 27, 2023

Hoffman responded to AaronGu’s question by insisting that his platform’s native token, XCH, is an equity, not a security. Hoffman explained that his establishment plans to register Chia in an exercise that he believes is the obvious way to be legal and what most practitioners do not want to do.

In response to Hoffman, the Principal Developer Advocate at Protocollabs, Matt Hamilton said Ripple did something similar but still got prosecuted by the SEC. Responding to Hamilton’s observation, Hoffman said Ripple’s mistake was selling XRP tokens before registering Ripple stock.

Hoffman acknowledged that although Chia owns XCH, it has never engaged in any selling exercise involving the token. He also clarified that farmers involved in the token’s farming program are responsible for all XCH trading seen in the marketplace.

For the XCH owned by Chia, Hoffman said they remain dormant, sitting on the chain and doing nothing until the company registers it as equity.

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Source: https://coinedition.com/chia-ceo-faults-gary-genslers-blanket-crypto-classification/