Some stablecoins might be viewed as security tokens in the eyes of the U.S. Securities and Exchange Commission, writes Decrypt Media. The SEC’s Senior Advisor for Digital Assets Valerie Szczepanik spoke of this issue at the SXSW conference. While she believes algorithmic and digital-asset backed stablecoins could be perceived as securities, the SEC still needs to look further into the issue.
As she explained, people buying into the stablecoin ecosystem, are doing so “with the expectation that somebody else is going to be holding a profit, or guaranteeing a profit, or holding the price at a certain level. Again, that could raise issues under securities laws.”
According to Szczepanik, it doesn’t matter to the SEC what name the stablecoin or token has, as it all comes down to what is “behind the label.” She recommends companies to contact SEC regarding any possible issues and ask for permission, instead of asking for forgiveness later.