The Securities and Exchange Commission (SEC) Chair Gary Gensler was recently interviewed by New York Magazine. According to the report, the respective SEC chair allegedly clung to his belief that Ethereum could be classified as a security.
According to the SEC Chair, cryptocurrencies are typically created by entrepreneurs who use various opaque mechanisms to promote their tokens and attract investors. However, an argument arose from this in which he claimed that at the heart of the entrepreneurs, the tokens of cryptocurrencies that they have created are securities because investors are hoping to profit from the efforts of intermediaries.
The SEC Chair also argued that the said tokens are considered securities under the law and thus fall under the jurisdiction of the SEC. This is reportedly an indication that the SEC Chair is unwilling to comment on the question of whether Ethereum is a security.
Gensler on Classifying Ethereum
You may recall that Gensler said Ethereum may be considered an unregistered security while he was a professor at MIT in 2018. The aforementioned SEC Chair was also heard slamming cryptocurrency initiatives that purportedly tried to pass themselves off as something else in order to avoid registering with the SEC.
The comments made by Rostin Begnam, the CFTC Chair, were very different from those made by the SEC Chair. According to the latter, Ethereum is a commodity. The CFTC Chair has been outspoken about his position on the aforementioned issue and even brought it up at a seminar in October 2022.
SEC Chair’s Thoughts on the Issues in the Industry
It should be noted that, in 2021, the said SEC Chair also weighed in on the debate over the regulatory status of stablecoins. Stablecoins, he claimed, should be classified as securities because they are known to be linked to a traditional currency or commodity. Stablecoins backed by cryptocurrencies, on the other hand, are deemed less clear and may be classified as commodities.
SEC on the Crypto Industry
Two of the biggest cryptocurrencies, Bitcoin and Ethereum, were seen to have been performing admirably in terms of price. As Ethereum had a YTD increase of up to 37% and Bitcoin by 46%, respectively.
Despite the various cryptocurrencies’ stellar performances, the U.S. The Securities and Exchange Commission continues to be aggressive in its efforts to regulate the cryptocurrency market more strictly. A number of significant cryptocurrency exchanges and custodians have already been sued in response to this movement, and several are also being investigated.
