A US Senator, who came to the fore with his work on cryptocurrency regulations, made a shocking statement about the leading altcoin Ethereum (ETH). Particularly prominent with its support for Bitcoin (BTC), Lummis’s statement that Ethereum is a security shocked the market. Here are the details…
Cynthia Lummis calls “securities” for leading altcoin
The US senator behind one of the most important pieces of bipartisan crypto legislation in the works stated that Bitcoin is the only cryptocurrency that can be considered a commodity. Because he said that ETH is now a security, thanks to the Ethereum merge in September. Merge, which took place in September, was a development that marked the transition from the proof-of-work (PoW) consensus algorithm to the proof-of-stake (PoS), as we have also reported as Kriptokoin.com. “The only thing that can qualify as a commodity is starting to look like Bitcoin,” said Senator Cynthia Lummis, a longtime Bitcoin owner and advocate.
In a program he attended on Tuesday, he said that ETH, the second-largest cryptocurrency by market capitalization, could be considered a security. “It is a security because of the way it has moved from proof-of-work to proof-of-stake,” Lummis said of the blockchain upgrade earlier this year. “The inability to [repurchase tokens] at the moment makes it susceptible to [being considered] a security,” he added.
FTX crash could have been avoided
However, he stated that this is of course likely to change. It is possible that Ethereum will become “decentralized enough to be considered a commodity later on”. Lummis, a member of the Senate Banking Committee along with Senator Kirsten Gillbrand, is one of the sponsors of the Responsible Financial Innovation Act, which was introduced in June.
If passed, the bill would give the Commodity Futures Trading Commission (CFTC) the power to set regulatory standards for crypto. Lummis said that among the bill’s goals is to clearly define what can be considered securities or commodities. Lummis said that if the bill had already passed, the collapse of crypto exchange FTX could have been avoided.
“The type of re-assumption going on with FTX and some of the other features that caused FTX to fail could have been avoided had the Lummis-Gillibrand bill been in effect,” Lummis said. Lummis said the collapse of FTX only underscores “a more empathetic enthusiasm” to reintroduce Lummis-Gillibrand legislation at the new Congress next month and set clear regulatory standards that will help consumers involved in the crypto-asset industry.
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