In a recent interview with New York Magazine, Securities and Exchange Commission (SEC) Chairman Gary Gensler said he believes the leading altcoin Ethereum (ETH) can be classified as a security.
Securities hint for leading altcoin from SEC boss!
As the ‘unauthorized issuance of securities’ lawsuit between the Securities and Exchange Commission (SEC) and Ripple (XRP) draws to a close, an interesting exit for the leading altcoin came from SEC Chairman Gary Gensler. Gensler notes that cryptocurrencies other than Bitcoin are typically created by a group of entrepreneurs who use various opaque mechanisms to promote their tokens and attract investors. In this context, he argues that in essence these tokens are securities, as investors hope to generate profits based on the efforts of intermediaries.
Gensler thinks these are also securities
As a legal matter, he argues that such tokens are securities that fall under the jurisdiction of the SEC. Meanwhile, Gensler’s previous comments on Ethereum indicated that he was unwilling to comment on whether Ethereum is a security. The SEC also weighed heavily on the regulatory status of stablecoins, mostly in 2021. Gensler believes that even stablecoins linked to a traditional currency or commodity such as the US dollar should be classified as securities. In contrast, he thinks stablecoins backed by cryptocurrencies are less clear and can be classified as commodities.
“They look like something else not to register with the SEC!”
On the other hand, Gary Gensler’s comments differ from those of CFTC Chairman Rostin Behnam, who sees Ethereum as a commodity. As you follow on Kriptokoin.com, Rostin Behnam has stated that he has a different view on the subject than Gensler, including at a symposium in October 2022, and has repeatedly expressed this position.
Gary Gensler previously suggested in 2018 while teaching at MIT that Ethereum could be classified as a unregistered security. The SEC boss has been critical of cryptocurrency projects ‘trying to look like something else’ to avoid registering with the SEC. He argued that many altcoin projects that are securities are trying to argue that they are not.
Despite the criticism the regulator has faced for seemingly failing to keep up with modern technologies, Gary Gensler has argued that the basic idea of raising funds from the public and providing them with basic explanations should remain in place, even for cryptocurrencies. According to Gensler, it’s important to innovate securities laws while ensuring that the public still enjoys basic protections.
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