Dash Core’s CEO Ryan Taylor outlined why he believes US regulators will not view Dash as a security.
In a recent episode of the Dash News podcast, Taylor detailed communications with the US Securites and Exchange Commission (SEC) regarding Dash’s regulatory standing, saying that he believes the decentralized currency’s case is very strong, saying: “I think we have an extraordinary strong legal argument for why Dash is not a security, and I think that that message has landed.” While the Dash Core team pursued a no-action letter from the SEC, Taylor believes that the agency is very reluctant to directly issue them, and that the lack of an explicit letter should not be construed to mean that Dash’s regulatory status is still in question:
“The SEC, as we’ve seen publicly, is very slow to act. The only no-action letter they have issued to date was for, essentially, a coupon for flights. It was so obvious that this wasn’t a security that a first-year law student could easily identify that it was not a security, yet it took them 54 phone calls and something like 10 months to get that no-action letter. I anticipate the more complex situations are going to take even longer.”
Dash Core’s meeting with the SEC, following silence, and what it means for Dash’s status
According to Taylor, the SEC had previously been active querying exchanges supporting Dash as to their opinion on its regulatory status:
“I did not actually believe that it will be possible for any cryptocurrency that actually launched to get a no-action letter, because the SEC hates to issue them after an asset has been issued, but what I can tell you is this: prior to October, when we submitted our no-action letter request to the SEC, I was getting multiple inquiries a month from exchanges that had been contacted by the SEC on Dash and asking them for their legal opinion on whether or not Dash was a security. Now, luckily, by that point in time we had already done most of the research, and were able to share summaries of the legal opinions that we had developed at that point. And so we were able to help a lot of them out on kind of a one-on-one basis. But the SEC was very active, and they were becoming active not just with Dash, but with many cryptocurrencies.”
Taylor detailed an in-person meeting with members of the SEC, and why he believes that Dash’s issue is now settled in their eyes:
“We submitted our letter, and then the following month met with the SEC in person in Washington, DC. I flew out there along with Glenn Austin, our CFO, and we met with the SEC for the better part of the afternoon. It was a lot like sitting across from a giant inquiry. There were tables of people who were peppering us with questions. A lot of them were, I would say, attempted “gotchas.” Since that meeting, I have not received a single inquiry. I believe that the objectives of educating the SEC, answering their concerns, has been met at this point. We have had some interaction with the SEC since, but it has taken a lot of effort on our part to get them to engage. They clearly don’t want to engage at this point, and my opinion is that they do not view Dash as a security, and that is why it has been difficult to get them to advance the process. It’s not an area that they have a concern with anymore.”
Being defined as a security by the SEC would impose additional regulatory burden upon exchanges seeking to list Dash, possibly causing many US-based platforms to not list Dash at all. Current standing may open the door for more exchanges and services to confidently list Dash.
The constant regulatory struggle as projects such as Decred have been affected
While Dash may have received a favorable opinion from regulators, other projects may not have as easy a time. Major exchange Poloniex recently restricted access to Decred and several other coins to US customers due to regulatory uncertainty, possibly stemming from Decred’s structure, where a single company claimed the first 8% of the coin’s eventual supply, and which at time of writing uses a single entity to approve and distribute all treasury funding requests. In order to head off similar issues, the Kin Foundation recently established the Defend Crypto Fund to fight for light and fair regulation for cryptocurrencies.