A spirited exchange on social media between Dogecoin co-creator Billy Markus and Tesla CEO Elon Musk has reignited discussions about the intrinsic value of cryptocurrencies. The dialogue, which unfolded on October 9, 2023, comes in the wake of a contentious claim by the U.S. Securities and Exchange Commission (SEC) that digital currencies lack “innate or inherent value.” Critiquing the regulator, the dogecoin co-founder wrote on X,
then return all the taxes y’all made me pay for receiving it you horrific evil hypocrites pic.twitter.com/rwisnADwLe
— Shibetoshi Nakamoto (@BillyM2k) October 9, 2023
Billy Markus, also known by his online pseudonym Shibetoshi Nakamoto, took to social media to challenge the SEC’s position. His post, which questioned the agency’s logic given the taxes he’s paid on cryptocurrency, quickly gained traction and became a focal point of discussion.
Elon Musk also weighed in on the issue, questioning the SEC’s logic. He asked, “It’s real if you have to pay taxes, but otherwise not real?”.
This public discourse serves as a backdrop to the SEC’s ongoing legal battle with Coinbase, one of the leading cryptocurrency exchanges. The SEC has argued that cryptocurrencies should be considered securities, invoking not only the ‘Howey Test,’ a legal framework used to determine what constitutes an investment contract, but also emphasizing that federal securities laws are designed to be interpreted flexibly.
According to the SEC, digital tokens derive their value solely from their underlying investment contracts, thereby lacking inherent value. Paul Grewal, Coinbase’s Chief Legal Officer, was quick to counter the SEC’s claims. He argued that the agency’s reasoning could extend to a variety of collectibles, from Pokemon cards to stamps, categorizing them as securities—a notion he found absurd.
Earlier this year, Coinbase found itself on the SEC’s radar when it received a Wells Notice, a formal warning of potential violations of U.S. securities law. The situation escalated in June when the SEC filed a lawsuit against the exchange for offering a range of cryptocurrencies that were not registered securities.
Simultaneously, the SEC is locking horns with Elon Musk over his acquisition of Twitter stock. The agency has accused Musk of failing to comply with a subpoena for additional testimony. Legal experts have noted that the penalties for such noncompliance could be severe. As of this writing, Musk’s legal team has not yet filed a response, and the SEC has declined to comment on the ongoing case.
