Gary Gensler Has No Comment on ETH Security

Ripple caused waves in the crypto community when CEO Brad Garlinghouse proposed that ETH be deemed unregistered as a foundation controls them. However, in 2018, Gary Gensler (SEC Chair) proposed there was a “strong case for Ether to be classified as a security.”

Gery Gensler agreed with his predecessor, Jay Clayton, in the recent Aspen security forum, saying:

“To the extent that digital assets like initial coin offerings, or ICOs are securities — and I believe every ICO I have seen is a security — we have jurisdiction, and our federal securities laws apply.”

SEC Stance

During the Yahoo Finance All Markets Summit, William Hinman, Director of the SEC Division of Corporate Finance, said:

The Ethereum network and its decentralized structure, current offers and sales of Ether are not securities transactions. And, as with Bitcoin, applying the disclosure regime of the federal securities laws to current transactions in Ether would seem to add little value.

However, Hinman also added that these were his personal understandings of the present state of ETH and not an official view.

Aspen Security Forum

In a Questions and Answers section of the Aspen Security Forum, Garry Gensler proposed that the Howey Test is good enough to determine the status of cryptocurrencies and if they were securities. However, he completely sidestepped the question of “if ETH is a security,” using that proposal as an answer.

The Future

While there is no definitive answer on the status of ETH security, Gensler says:

“We need additional Congressional authorities to prevent transactions, products and platforms from falling between regulatory cracks,”

Appearing to say that the SEC needs more staff to cope with the current regulations. Whether or not staffing is the issue is yet to e determined or changed.

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