Gary Gensler Refuses To Admit Ethereum Is A Security

The discussion of whether or not cryptocurrencies are a real asset is still present and in the interview conducted with Gary Gensler, President of the SEC, by CNBC refused to admit if Ethereum is a value or not according to Vishal Chawla en Crypto Briefing.

However, the SEC chairman reiterated the need to include cryptographic tokens in the scope of securities regulations. Additionally, the SEC has come under fire for its unclear guidelines on cryptocurrencies in recent months.

In a Monday interview with CNBC Squawk Box, the SEC chairman discussed the securities laws surrounding cryptocurrencies with Andrew Sorkin. When Sorkin challenged him on whether he thought Ethereum could be classified as a security, he deflected the question, noting that he would not talk about a specific crypto asset. “Can you explain your point of view on whether Ethereum is a security or not? I think you actually suggested that it is not, but while you believe that Ripple is a security, and I know there is an ongoing lawsuit related to Ripple, but is it? Could you speak on the subject of Ethereum? Asked Sorkin.

“I’m not going to talk about any particular issue,” Gensler told CNBC. He added that the SEC does not “get involved in public forums talking about any project.”

Gensler’s public stance on crypto number two marks a stark contrast to its predecessor. Jay Clayton, who claimed that Ethereum was not a security during his tenure at the helm of the SEC.

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Securities are instruments that represent ownership in a common company with the expectation of a profit. The question of whether crypto assets like Ethereum can be classified as a security has been a hot topic in recent years as the space has grown. While the SEC has been criticized for its unclear guidance on cryptocurrencies, Gensler has repeatedly stated that cryptocurrencies tokens DeFi could be classified as securities. The SEC has also been in a legal battle widely advertised with Ripple after he accused the company of selling unregistered securities since late 2020; it is scheduled to come to an end sometime this year.

Commenting further on the regulatory environment surrounding cryptocurrencies, Gensler commented that many crypto tokens could be classified as securities and should be registered with the SEC. “Unfortunately, too many of these projects are trying to say ‘well, we are not a security, we are just something else.’ I think the facts and circumstances suggest that they are investment contracts, they are securities and should be recorded.”

While Gensler did not elaborate on his current views on Ethereum’s regulatory status, he did tell a class at MIT that he thought he would pass the Howey test (an official framework under the U.S. Constitution for determining whether a particular investment is an offering of securities)when he was lecturing at the university in 2018. At the time, Gensler explained that he thought Ethereum would pass the test.

“I think Ether, when it was made in 2014, would pass this test. When I say ‘pass,’ I mean it’s a security, ”Gensley said. He added that the SEC decided it had decentralized enough for 2018 and therefore decided to “let it go the other way.” In 2014, Ethereum raised $ 18 million worth of Bitcoin in the first initial coin offering to start the project.

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Despite Gensler’s lack of clarity around Ethereum, he has argued that Bitcoin is not a security then or today. “Bitcoin was born when mining started as an incentive to validate a distributed platform,” he said in 2018. Since then, the SEC has approved the first funds traded Bitcoin-related trading linked to the prices of Chicago Mercantile Exchange Bitcoin Futures under Gensler’s leadership.

Gensler’s refusal to confirm or deny his thoughts on how other cryptoassets would be classified could concern technology believers. It also suggests that assets built on top of Ethereum, such as the DeFi tokens that Gensler has mentioned in the past, could be subject to regulatory action in the future.

It is also worth noting that the SEC’s decision on whether a token is a security is subject to change. In December 2020, the Stacks project, focused on Bitcoin, said the SEC had changed its classification from value token to non-value once it showed that it was decentralized enough.

Ethereum is trading at $ 3,000 and the Ei indicators are mostly bearish.

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Gary Gensler Refuses To Admit Ethereum Is A Security

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