The U.S. Securities and Exchange Commission (SEC), led by Gary Gensler, has been clamping down big time on the cryptocurrency industry. This week it filed charges against Coinbase and Binance, the two largest cryptocurrency exchanges, for violating U.S. securities laws—claimed some cryptocurrencies are unregistered securities, while others remained, puzzlingly, unmentioned.

In fact, of the countless cryptocurrencies on the market, only a dozen or so have been called securities. Why is that?

Robert Cohen, former SEC Cyber Chief spoke to Laura Shin on Unchained Podcast about the disparity.

"There is a seeming element of real bad luck and randomness, and getting singled out to be one of the 10 or 12 tokens that are mentioned when there's hundreds that could have been,” Cohen told the journalist and podcast host. "When you think about a government taking action, that sort of randomness seems rather unfair."


"If the SEC were passing rules, it affects everyone the same way, and people [should] have a chance to comment,” he added.

Cohen, who now works as an attorney at Davis Polk & Wardwell LLP, also said the SEC's actions are raising a cloud of suspicion where one may not be warranted.

“When the SEC says that a token is a security and was not registered, they seem to be implying that something wrong happened,” he said. “[It] casts a negative suggestion over the people involved in that token in the first place.”


"It's having a real impact on real people and real businesses,” he noted.

Gary Gensler has not been especially forthcoming on the status of varioius tokens. He eluded congressional questions about Ethereum, has “shilled” others, and none of the current enforcement actions—including the latest against Coinbase and Binance—involve Proof-of-Work assets. 

“By the way,” Cohen said, “This may never get decided—these complaints may never actually go to trial, they might get settled, they might get dismissed for other reasons.”

That will leave the crypto industry in much the same position it started in.

"There may never actually be a decision on whether a token is a security,” he said.

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