Discussions for a proposal to hire a legal representation for Cosmos Hub has been put into play. This comes on the heels of recent legal actions targeting major cryptocurrency exchanges, namely Binance and Coinbase.
The proposal to hire legal counsel for the Cosmos hub is being considered as a precautionary measure, partly influenced by the Securities and Exchange Commission’s classification of ATOM, the native cryptocurrency of the Cosmos, as security.
Within the draft proposal, a member of the Cosmos community known as RoboMcGobo, who prefers to use a pseudonym, highlighted the potential wide-ranging repercussions of the allegations mentioned in the Binance lawsuit.
RoboMcGobo, a pseudonymous member of the Cosmos community, expressed concern that if the Binance lawsuit leads to a court ruling classifying ATOM as a security, it could have significant implications for the Cosmos Hub and the ATOM token. To prepare for such scenarios, it is suggested that the Hub considers hiring legal representation to ensure its interests are protected.
The proposal suggests that having an attorney readily available would be advantageous in safeguarding the Hub’s position and making sure its voice is heard in a case that may determine its future.
While the SEC has not explicitly requested proof that ATOM or other listed cryptocurrencies are securities, Jacob Flowers, another member of the Cosmos community, noted that part of the SEC’s case against Binance will likely involve proving the sale of securities by the centralized exchange.
While Flowers doesn’t believe the Hub itself may require legal representation, he suggests that the interchain foundation involved in ATOM’s initial creation could benefit from the guidance of a securities attorney.
However, there are concerns that hiring a lawyer might raise questions about centralization and regulatory implications.
Addressing the concerns raised, Lil_D, a member of the community, responded promptly by acknowledging that while legal reviews and attorneys can be time-consuming, they also provide a crucial layer of security for projects.
Also read: Binance, SEC Propose Deal on Access to Customer Funds
