Dash, a cryptocurrency with the symbol $DASH, was the only one with a Proof-of-Work (POW) consensus algorithm cited by the SEC as a security tool in the lawsuit filed against Coinbase.
So, in the regulator’s view, private currency, which has part of its mining with POW and part with Proof of Stake (POS), and the use of masternodes, may bear some resemblance to financial assets.
Such a classification could have significant implications for the technology underlying DASH and for the investors who use it. This is because cryptocurrency may face stricter regulations, including for companies that work with the currency.
What are the main considerations when dealing with Dash after the SEC included cryptocurrency in the list of financial assets?
One of the immediate implications is the need to comply with regulations imposed by the SEC. This includes disclosing detailed financial information, filing regular reports and complying with investor protection and anti-money laundering regulations.
While these measures are designed to increase transparency and security for investors, they can also create additional challenges for businesses and users of DASH, requiring significant investment in resources and personnel to ensure proper compliance.
In addition, $DASH’s classification as a security brings restrictions to trading and offering the cryptocurrency. These may include registration requirements for brokers and trading platforms, as well as restrictions on who can buy and sell DASH and how it can be offered to the public. Such restrictions can affect the liquidity and accessibility of the altcoin in the market, limiting its growth and adoption potential.
Another relevant implication is the tax impact on private cryptocurrency holders. Depending on applicable tax laws, holding, trading and selling cryptocurrencies may be subject to capital gains tax or other tax obligations. This requires investors to seek expert advice to ensure proper tax compliance and avoid undesired consequences.
Pressure mounts against exchanges and listed cryptocurrencies
In short, the SEC’s classification of DASH as securities introduces a new layer of regulation and compliance for cryptocurrency and its participants.
However, the SEC’s citation on cryptocurrencies in the lawsuit filed against Coinbase makes it clear that not only exchanges are in the crosshairs of regulators. Moreover, it shows the willingness of the US to step up regulation related to the crypto market.
In recent months, several exchanges have left the country and others are planning to leave in the future, indicating that the United States is running out of time to get its digital currency technology under control.
Source: Live Coins
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
