U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler said in a recent interview that he believes Ethereum (ETH) can be classified as a security.
According to Gensler, cryptocurrencies other than bitcoin are often developed by entrepreneurs, using various opaque processes to advertise and attract investors to buy their tokens. The tokens are securities in nature because investors look to profit from the efforts of intermediaries, he said. Therefore, they fall under the jurisdiction of the SEC.
SEC chairman hints #Ethereum (#Ethereum) can be classified as securities @azcoinnews @EthereumMemes @Ethereum Network @WeekInEthNews $ ether https://t.co/ATT80lixdv
— Kyptos (@azcoinnews) February 24, 2023
Gensler’s previous attitude indicated that he did not want to explicitly comment on whether ethereum is a security.
In 2021, he also commented on the regulatory stance on stablecoins, arguing that they are related to traditional currencies or commodities such as the U.S. dollar that should be considered securities. On the other hand, stablecoins backed by cryptocurrencies are less obvious and could be classified as commodities.
Speaking at MIT in 2018, Gensler proposed classifying ethereum as an unregistered security. The SEC chairman has previously punished crypto projects that managed to avoid registering with the SEC. Sadly, many crypto schemes are clearly securities but try to disguise themselves as something else, he said.
While the criticism seems inappropriate for new technologies, Gensler emphasized that the basic principles of raising funds from the public and providing basic disclosures should remain the same, even for crypto tokens. According to Gensler, it is important to incorporate innovation into securities regulations while continuing to provide the public with the necessary protections.
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according to Kyptos