SEC Deliberates Whether Ethereum Qualifies as a Security or Commodity
The second most valuable cryptocurrency behind Bitcoin, Ethereum, was subject to a regulatory review by the Securities and Exchange Commission (SEC), which is considered a commodity or a security.
Gary Gensler, former chairman of the Commodity Futures Trading Commision, speaking at MIT Technology Review’s Business of Blockchain conference on Monday suggested that government officials need to be looking at the largest cryptocurrencies by market capitalization, not just ICO’s, when deciding what should be classified as securities.
Meanwhile investors appear indifferent and the market remains confident. Ethereum has been showing significant gains lately and managed to overcome a $750 barrier last week after being low for more than two months.
If the SEC decides that a cryptocurrency is a security it can then only be traded on registered exchanges within the U.S.
Those at the center of the debate, the developers and coders who make the Ethereum network run, didn’t seem to care much about the issue as they partied through a three-day gathering where scaling took top billing.
An SEC decision to classify Ethereum’s Ether cryptocurrency as a security could have far-reaching consequences for other digital monies originally crowdfunded through initial coin offerings (ICOs).
By pre-selling Ether, Ethereum could be viewed by the SEC as a common enterprise that had influence over its value, similar to how a public company’s actions are key to its stock’s value.
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