Bitcoin 2.0 leaders deny reports of SEC action: “We do software, not securities”

Wall Street Journal reached out to leaders of the so-called Bitcoin 2.0 currencies, which can serve as a platform for

Wall Street Journal reached out to leaders of the so-called Bitcoin 2.0 currencies, which can serve as a platform for decentralized exchange of startup shares, following reports of a Securities and Exchange Commission (SEC) investigation.

The Coin Fire website showed a heavily redacted letter appearing to request cooperation in such an investigation. It claimed that several hundred letters have been sent out.

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The SEC has previously charged Erik Voorhees for marketing shares of two bitcoin-related websites without registering with the Commission. There has been speculation that the SEC will come after other companies connected to the sale of what can be constituted as digital currency-based securities.

Founders of several decentralized exchange platforms denied receiving letters.

Counterparty also said in a statement:

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“The software that we develop, like all capable software, may be used for both legitimate and illegitimate purposes. We do not condone the creation of unregistered securities on the Counterparty network, but we have no control over their issuance.”

Representatives of Mastercoin, BitShares, and Ethereum also denied that their innovations are securities. Some referred to their creations as “software”, while others called them “tokens”.

David A. Johnston, Chairman of Mastercoin Foundation, said he was confident that issuers of digital tokens on his platform have done their “due diligence to make sure they weren’t selling securities.”

Despite their name, “BitShares” aren’t really shares. The name is “an analogy”, said Daniel Larimer, CEO of Invictus Innovations, which developed the BitShares project.

Their collective message contrasts sharply with that occasionally observed in the communications of similar platforms, which openly and proudly use terminology such as “shares” and “equity”.

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