- SEC’s Gensler suggests that non-Bitcoin cryptocurrencies may be considered securities.
- Ethereum’s classification as security is being contested in a lawsuit.
- The lack of clear guidance from the SEC on cryptocurrencies is frustrating for the industry.
Bill morgan, a lawyer and digital asset fanatic has gone to Twitter to express confusion over SEC Chairman Gary Gensler’s recent statement on cryptocurrencies. According to Bill, Gensler believes all cryptocurrencies except Bitcoin may be considered securities, leading him to question whether Ethereum is being “hinted” at as a security.
— bill morgan (@Belisarius2020) May 6, 2023
This statement has caused debate in the crypto community, with many wondering about the implications for other cryptocurrencies. According to a tweet by legal expert Fred Rispoli on March 23, the SEC officially deemed Ethereum a security.
This classification was made in the context of an ongoing lawsuit against the cryptocurrency in Southern California. Furthermore, Rispoli points out the irony that Coinbase and the SEC are being sued simultaneously, highlighting the complex legal landscape for cryptocurrencies.
Complicating matters further is the lack of agreement between regulatory agencies on classifying cryptocurrencies. This is evident in attorney Paul Grewal’s tweet that asserted that the SEC and the CFTC disagreed on whether Ethereum should be considered a commodity or a security.
At times, the SEC and CFTC don’t agree on the definition of a commodity or a security. For instance, the CFTC chair has said Ethereum was a commodity, while the SEC chair has hinted Ethereum might be a security. 11/15
Based on Grewal’s tweet, the Chair of the CFTC classified Ethereum as a commodity, while the Chair of the SEC suggested that it may be considered a security. In another tweet, Grewal asserted that the lack of clear guidance from the SEC on cryptocurrencies is a primary source of frustration for the industry.
Grewal further noted that despite efforts to engage with the SEC and seek clarity on the rules, the response had been silence or enforcement actions. This has led some to question whether the SEC follows a good faith rulemaking process, as required under the Administrative Procedure Act (APA).