Gary Gensler, chairman of the US Securities and Exchange Commission (SEC), has yet to give a direct answer as to whether ethereum (eth) is legally classified as a security.
During a Thursday interview with Bloomberg, the president was asked to clear the regulatory fog surrounding the second-largest cryptocurrency, as ethereum spot ETF applications are now piling up on his agency's desk.
Why isn't Gensler responding?
Gensler answer was, as usual, vague and redirected listeners to the legal precedent established almost a century ago called the Howey Test.
“In any of these crypto tokens, it comes down to facts and circumstances as to whether the investing public anticipates a profit based on the efforts of others,” he said in apparent amusement after receiving another “crypto question.”
“We have presentations before us; I'm not going to comment,” he added.
Gensler's hesitation to respond fuels an era of confusion in the cryptocurrency market that dates back to 2018, when former SEC Director William Hinman published a speech defending his personal view that ethereum It is classified as a commodity, rather than a value.
Gensler and the agency have since denied making any official statements or proclamations regarding their views on eth and have avoided the question on numerous occasions when asked.
They have also alleged that dozens of other major cryptocurrencies, including Solana (SOL) and Cardano (ADA), are securities in lawsuits against major cryptocurrency trading platforms, including Coinbase and Binance.
However, there are reasons to believe that the agency views eth differently. Like bitcoin, the SEC has approved CME Ether futures trading. According to Bloomberg ETF analyst James Seyffart, this implies that the asset is already considered a commodity.
Additionally, Commodity and Futures Trading Commission (CFTC) Chairman Rostin Benham has explicitly labeled eth as a commodity for years, and several members of Congress who support cryptocurrencies have taken his side on the issue. .
Testifying before a House committee on Wednesday, President saying that Prometheum, an SEC-approved crypto broker, could create more regulatory uncertainty if the SEC allows it to classify eth as a security on its platform. He is working closely with Gensler on this matter.
“It would then put our registrants – our exchanges that list Ether as a futures contract – in breach of SEC rules rather than CFTC rules,” Benham explained.
Cryptocurrencies remain a speculative place
Although he avoided the actual question, Gensler made sure to re-emphasize that cryptocurrencies are a “highly speculative asset class,” referencing bitcoin's volatility over the past week. He said:
“As an investing public, we should be aware that this is a bit of a rollercoaster for these volatile assets, and then the question is: how do you firm up the foundation?”
In approving bitcoin spot ETFs for trading on public markets in January, Gensler noted that the SEC's approval was “not an endorsement of bitcoin” and stated that the asset is often used for financial crimes.
bitcoin is up 53% since the beginning of the year, briefly hitting a new all-time high of $69,200 on Tuesday.
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