Bitcoin Daily: SEC Says Airdrops May Be Securities; Ex-PayPal CEO: Cryptos Are Going ‘Closer To Zero’

AT&T is facing a lawsuit from a cryptocurrency investor who claims that the telephone company’s negligence caused him to lose $24 million of digital currency, CNBC reported. The suit was filed by Michael Terpin in U.S. District Court in Los Angeles, who said that the tokens were stolen through his cell phone account. (AT&T was his service provider.) In the complaint, Terpin said, “What AT&T did was like a hotel giving a thief with a fake ID a room key and a key to the room safe to steal jewelry in the safe from the rightful owner.” AT&T, however, provided a statement to CNBC that said  “we dispute these allegations and look forward to presenting our case in court.”

Blockchain startups like to give users free coins through so-called “airdrops” to get around securities rules, but the U.S. Securities and Exchange Commission (SEC) has apparently suggested that they may, in fact, be securities, according to The Next Web. In a cease-and-desist letter sent to one company, the agency said the company’s “Bounty Program constituted an offer and sale of securities.” The reason was that the coins advance the company’s “economic interests and foster a trading market for its securities.”

In other news, digital currencies are not legal tender with the current laws in Hungary, Cryptovest said. Even so, the government is reportedly looking into rules to govern digital currencies. To that end, the finance ministries, tax authority and central bank are working to evaluate how digital currencies will impact the country’s economy, law enforcement, taxes and laws.

PayPal’s former CEO, Bill Harris, thinks cryptocurrencies don’t live up to the promises of its promoters, MarketWatch reported. In remarks to CNBC, Harris said, “The cult of bitcoin makes many claims: It’s instant, free, scalable, efficient, secure, globally accepted and useful — it is none of those thing.” In the past, Harris said that investors should be wary of bitcoin — he wrote a column on the topic in April. At the end of that month, bitcoin was worth a little more than $9,000. The popular cryptocurrency was at $6,267.33 on Wednesday (Aug. 15) as of 7:35 p.m., according to CoinDesk.