SEC Chairman Gary Gensler hinted that he thinks Ethereum (ETH) could be classified as a security in a recent interview with New York Magazine.
In a recent maintenance with New York Magazine, Securities and Exchange Commission (SEC) Chairman Gary Gensler hinted that he thinks Ethereum (ETH) could be classified as a security.
Gensler said cryptocurrencies other than Bitcoin are usually created by a group of entrepreneurs who use various opaque mechanisms to promote their tokens and attract investors. He argued that at their core, these tokens are securities, as investors hope to profit from the efforts of intermediaries.
He argued that, legally, these tokens are securities that fall under the jurisdiction of the SEC.
Gensler’s previous comments on Ethereum indicated that he was unwilling to comment on whether Ethereum is a security.
In 2021, he also weighed in on the regulatory status of stablecoins. He believes that stablecoins tied to a traditional currency or commodity, such as the US dollar, should be classified as securities. In contrast, stablecoins backed by cryptocurrencies are less clear cut and could be classified as commodities.
Gensler’s comments differ from those of CFTC Chairman Rostin Behnam, who views Ethereum as a commodity. Behnam has repeatedly asserted his position, including at a symposium in October 2022, where he claimed Gensler had a different view on the matter.
Gensler previously suggested that Ethereum might be classified as an unregistered security in 2018 while teaching at MIT.
The SEC boss has previously criticized cryptocurrency projects that attempt to masquerade as something else to avoid registering with the SEC. He argued that many cryptocurrency projects that are securities try to pretend they are not, which he thinks is unfortunate.
Despite criticism the regulatory agency has faced for seemingly being out of step with modern technologies, Gensler argued that the basic idea of raising funds from the public and providing them with basic information should remain in place. , even for crypto tokens.
According to Gensler, it is important to innovate in securities laws while ensuring that the public still receives basic protections.