The SEC Thinks Crypto Airdrops Are Securities. Here’s Why This Lawyer Thinks It’s Wrong

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This week, Republican Representatives Tom Emmer and Patrick McHenry sent a letter pressing SEC Chair Gary Gensler for clarity on how securities laws apply to airdrops.

With billions of dollars worth of tokens airdropped this year alone, projects need clarity more than ever.

In this episode, Amanda Tuminelli, Chief Legal Officer of the DeFi Education Fund, dissects the SEC’s stance on airdrops, why her organization believes the SEC has stretched the legal definition of “compensation” too far, and what Congress might ask Gensler in his upcoming hearing.

Plus, she talks about how the SEC “regrets” any confusion it caused for using the term “crypto assets securities,” since the agency now admits that tokens themselves are not securities.

Show highlights:

• Why Amanda believes the SEC’s position on airdrops doesn’t make sense
• Why the DeFi Education Fund sued the SEC over the BEBA airdrop
• How the SEC’s position on airdrops has been clear for a while, but is “wrong” according to Amanda
• Her take on users bypassing the geographic restrictions to claim airdrops in the U.S.
• How and why the SEC has changed its language around “crypto assets securities”
• How the SEC’s new position on crypto assets implicating securities laws seems to rest on the “embodiment” theory
• Why Amanda believes the Supreme Court or Congress may be needed to step in
• What Amanda expects Congress to question Gary Gensler about in the hearing next week
• Amanda’s takeaways from the first Congressional DeFi hearing last week
• How she expects the presidential election will impact the regulatory landscape in the U.S.

Thank you to our sponsors!

• Coinbase
• iTrustCapital
• Polkadot
• Mantle’s FBTC
• Stellar

Guest

• Amanda Tuminelli, Chief legal officer of the DeFi Education Fund
  • Previous appearances on Unchained:
    • Gary Gensler’s Case Against Uniswap: Does the SEC Even Stand a Chance?
    • Is This the End of DeFi? Why the US Government Is Going After Tornado Cash

Links

Airdrops:

• Blockworks: Republican Reps. ask Gensler for clarity on how securities laws apply to airdrops – 
• Gabriel Shapiro’s tweet: “We may *disagree* that the position is correct but it’s not unclear.”
• CoinDesk: Crypto Airdrops Ban U.S. Users, but Americans Are Claiming Tokens Anyway
• SEC’s amended complaint in the Binance case

BEBA case

• DeFi Education Fund suing the SEC 

First Congressional Hearing on DeFi

• Unchained: First Congressional Hearing on DeFi Highlights Divide Between Republicans and Democrats