Social media and the digital world are buzzing with news that the Securities and Exchange Commision (SEC) has declared Initial Coin Offerings (ICO) as ‘securities.’ The crypto world was hurling abuses at the SEC, and so one man, the leader of the Declaration of Currency Independence, John McAfee stepped up.
McAfee Vs. SEC – The Debate that’s needed - @amu4biz @officialmcafee
John McAfee has been seen on Twitter creating awareness about why cryptocurrencies are far superior to fiat currencies. However, his logical thinking turned into emotions a few days ago when the SEC chairman, Jay Clayton declared that ICO’s are securities.
“The head of the SEC declared today that all ICOs are securities. While I STRONGLY disagree, and believe that the majority of ICOs do not meet the Suprene Court Howey Test for securities, I will submit, for now, to their rules and will not work with future ICOs.. But, I'll be back”
McAfee is not one to keep patient and so a few minutes later tweeted-
“And, please God, let the SEC prosecute anything prior to this date, the first announcement that all ICOs are Securities. If it does, I will be the greatest thorn in the side of the SEC since the founding of our Constitution. Overreach of power is the worst of all corruption.”
SEC’s Abuse of Power
Patience would have only led him to surrender to the SEC and thus resulting in the SEC doing what they do best which was using their power to abuse a society and technology which they could not benefit which was the crypto community.
Administrative bodies like the SEC have taken responsibility for all three functions of the United State’s Constitution.
The United States Constitution can be explained as follows-
Article I of the Constitution gives Congress the power to make laws of the United States of America.
Article II enables the President to take care that the laws be executed confidently.
Article III charges the federal courts with using laws passed by Congress and hence help enforce them in deciding cases and if necessary a helpful remedy.
Thus the constitution does not give as much power to a single agency.
The SEC has a habit of turning individual defendants into the SEC tribunal and not in an Article III court which makes the SEC do as they please.
Lucia v. Securities and Exchange Commission clarified the abuse of power of SEC and was argued in the Supreme Court.
Raymond Lucia ran an investment business which included promotional lectures called “Buckets of Money.” The SEC found this to be deceptive and revoked Lucia’s investment-adviser registration in 2013. In the objection by Lucia, he said that the punishment was not only unfair but the forum which the SEC delivered it was biased against him.
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The SEC is seen to create rules and solve disputes even though they are removed from the electoral process. It uses administrative law judges (ALJs) who work for the SEC and hence is not fair in the whole trial.
After the financial crisis, the Dodd-Frank Act gave expanded powers to SEC and thus according to a senior lawyer, Alexander Platt the SEC tends to treat their matters with their own ALJ’s. From 2006 to 2014 the number of cases SEC brought to the federal court fell from 200 to under 150, and the number it led to ALJ’s rose from 350 to more than 600.
McAfee’s Realistic Approach
Coming back to the matter of ICO’s being a security, as declared by the SEC chairman what needs to be understood is the past. If SEC is already seen to create chaos by abusing their power, you can expect many things falling apart in the crypto world. Thus John McAfee will be able to change this outlook and get the majority of supporters by having a one on one debate with the SEC.
John McAfee has changed decisions before, by using his wit, and experience in creating better decisions. These decisions helped change abuses which could have infiltrated our personal spaces.
McAfee tweeted an example of how he helped solve a legality on the same day. The tweet read-
“For those unfamiliar with my ferocity: 7 days after my CNN debate with the FBI, the FBI dropped their demand that Aplle give them a backdoor. I promise that if the SEC @SEC_News accepts my offer to debate them, they will stop their insistence that ICOs are secutities.”
McAfee in the case above debated the FBI on live television and ensured that the public realized that FBI was going to intrude into a mobile phone by using dangerous methods. The fear of the people and the honesty by McAfee changed the FBI’s mind.
In the case of ICO’s McAfee’s knowledge is undefeatable, if he thought ICO’s were a security he would have happily declared it so. What’s he got to gain?
Next, the Howey Test helps determine what comes under ‘securities.’
In 1946, W.J. Howey sold citrus grove plots to investors who leased it back to Howey who would harvest and sell the citrus products. The case in hand has been an investment contract and hence clarified as security. The four essential criteria which it took into consideration for a financial instrument to be a security were-
• It must be an investment of money
• With an expectation of profit
• In a common enterprise
• With the profit to be generated by a third party.
The SEC chairman has not given his take using the Howey Test, and thus if a declaration has to be made why not give fair enough reasons to the public on a live debate.
SEC’s Past History
The SEC has lost many cases already which prove its ignorance and sly nature.
Examples - Mark Cuban, the billionaire was harassed for insider trading. The jury found him innocent with a lack of evidence.
In a recent case, SEC’s very own ALJ James Grimes could not understand why Charles Hill was wrong. Apparently, according to the SEC, Hill’s gained $744,000 of illegal profit in shares of Radiant Systems Inc in 2011 after learning that the provider of software to hospitals and retailers was in talks to be sold to NCR Corp. Thankfully to Charle Hill the ALJ was honest!
The Power of the Crypto Community
The SEC needs to step up and agree with McAfee. Well before, the number of citizens against SEC’s ploy will spam them thanks to McAfee’s unbelievable support.
His tweet which urged the people read.
“The SEC chairman is Jay Clayton. He can be reached by phone at 202-551-2100 or by email at email@example.com Flood this mother fucker's voice mail and inbox with demands that he debate me. CNN is ready! Show this prick what the crypto community is all about!”
SEC used tactics, but this time these atrocities may not work!
The Hodlers, Buyers , Sellers and remaining of the crypto community are too smart for them.
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