BlackRock, the world’s largest asset manager, has issued a warning to the US Securities and Exchange Commission (SEC) about Bitcoin’s potential classification as a security.
The asset manager emphasized the potential consequences, stating that such a classification could make trading and handling Bitcoin in the United States difficult.
BlackRock is concerned about the potential negative impact on Bitcoin’s trading value if it is classified as a security by the SEC.
Drawing parallels to the SEC’s legal actions against Ripple, BlackRock stated that the market value of XRP dropped from $100 billion to $10 billion as a result of regulatory scrutiny and litigation against Ripple and XRP.
There is growing speculation within the crypto community that the SEC will classify Bitcoin as a security. The impending decision, which is expected in January, is based on the SEC’s evaluation of a Bitcoin exchange-traded fund (ETF).
The warning from BlackRock emphasizes the significance of this decision and its potential implications for Bitcoin’s market dynamics.
The reference to Ripple’s legal challenges by BlackRock serves as a cautionary tale. Ripple suffered negative consequences as a result of SEC actions, including the loss of partnerships and a significant drop in the price of XRP.
This historical context emphasizes the potential ramifications for Bitcoin if subjected to similar regulatory scrutiny.
Notably, Bitcoin and Ethereum have not been classified as securities, setting them apart from certain other crypto.
This distinction has become a focal point, especially as the SEC conducts analyses on various digital assets, including the likes of Cardano.
