Hong Kong-based Animoca Brands remains unfazed by the Securities and Exchange Commission’s (SEC) recent characterization of the SAND cryptocurrency as a security in its complaints against Binance.US and Coinbase, according to South China Morning Post. Animoca co-founder and chairman Yat Siu stated that the company operates globally and is not overly concerned with what happens in one jurisdiction. Siu also noted that the focus of the SEC is primarily on the US, and as such, this should not significantly impact Animoca Brands in broader markets where SAND is widely available and accepted, including in more progressive jurisdictions like Hong Kong and Japan.
Siu also mentioned that Animoca Brands’ strategy has been to primarily focus on non-US markets due to regulators in the country having a “blockchain-hostile” approach. Recent events have only spurred the company to “place more emphasis on other markets.”
Despite Siu’s nonchalant statements, the SEC’s conviction that many cryptocurrencies are securities will have legal implications for companies involved with those tokens, which could spill across borders.
The View of The Sandbox Co-Founder on SEC’s Characterization of SAND
The SEC’s characterization of SAND has not affected The Sandbox’s daily operations, according to co-founder Sabastien Borget. Borget added that the company disagrees with the SEC’s views. However, it is unlikely to have any impact on operators and issuers of these cryptocurrencies until the legal proceedings conclude. The legal proceedings could potentially end favorably for the crypto industry.
The SEC’s complaint against Coinbase and Binance.US includes violations of securities laws for selling multiple cryptocurrencies that it considers securities, including top ten projects like MATIC and ADA, as well as multiple multiverse projects like SAND and MANA. According to the SEC, these cryptocurrencies are securities under the Howey Test because they were issued as a fundraising tool for the companies behind them, and buyers expected a return on their investments.
The SEC’s complaint states that SAND was used to raise $3 million via private sales on Binance.com, and investors were “reasonably” led to “expect to profit from [the company’s] efforts to grow the Sandbox protocol.”
In the meantime, many companies like Animoca have written off growth in the US amid the uncertain regulatory environment and are already shifting focus to more dynamic markets like Asia and the Middle East.