Republican Reps. ask Gensler for clarity on how securities laws apply to airdrops

cryptowiki.ru:

Two Republican Congressional Representatives are demanding clarity from the Securities and Exchange Commission about how regulators view airdrops.

Reps. Tom Emmer and Patrick McHenry penned a letter to SEC Chair Gary Gensler Tuesday, expressing concern that regulators have “misapplied” securities laws to airdrops, a technology, they say, that plays a “crucial role in the development of a decentralized blockchain system.”  Airdrops, which Emmer and McHenry define as digital assets that are distributed to early users of certain protocols, have, like many parts of the crypto industry, been in a regulatory gray area in recent years.

In a 2018 enforcement action against Tomahawk Exploration’s initial coin offering (ICO), the SEC claimed even tokens distributed for “free,” like airdrops, are securities because they create a public trading market.

Airdrops are normally given to early community members or others who perform menial tasks (such as downloading an app or promoting a project), the SEC added, but even so, there does not need to be a transfer of money to constitute a “sale.”   Read more: House lawmakers clash at first-ever DeFi hearing  It’s a similar argument to the ones securities regulators made in the 1990s during the dot-com craze with “free stock” enforcement actions, attorneys at Hunton Andrews Kurth wrote in a blog post.  “In what have become known as the ‘free stock’ cases, investors were typically required to sign up with issuers’ websites and disclose personal information in order to obtain the ‘free’ shares,” the post reads. “The SEC likewise took the position that the issuers received value (and did not make a gift) by creating a public market for their shares, increasing their business prospects,