Gary Gensler is a former investment banker and American financial regulator who has been the chairman of the United States Securities and Exchange Commission (SEC) since April 2021. He has recently been in the news owing to the litigation against Ripple and SEC’s legal measures against various exchangers/firms including LBRY, and Kraken.
Criticisms of Gensler’s ostensibly harsh stance on cryptocurrency regulation have significantly increased since he was appointed head of the SEC. It has also been claimed that Gensler and the SEC have failed to provide clear direction for crypto enterprises on matters such as registration and compliance, as well as to make crypto compliance appealing and accessible to market participants.
Gensler has an update about Ethereum. Is there a reason to be cautioned? Let’s explore.
Could Ethereum be Classified as a Security?
Securities and Exchange Commission (SEC) Chief Gary Gensler stated in a recent interview with New York Magazine that he believes Ethereum (ETH) might be classed as a security. According to Gensler, other cryptocurrencies outside Bitcoin are often developed by a group of businesspeople that utilize various covert strategies to market their tokens and draw in investors. He stated that these tokens are fundamentally securities since investors are betting on the efforts of intermediaries to make money.
Gensler previously expressed his reluctance to address the question of whether Ethereum is secure in his remarks regarding the cryptocurrency. He also commented on the regulation of stablecoins earlier in 2021. According to him, stablecoins that are connected to a conventional currency or gold, like the dollar, should be categorized as securities.
Gensler’s Criticism of Crypto Projects
The head of the SEC has previously blasted cryptocurrency initiatives that attempted to pass themselves off as something else in order to avoid registering with the SEC. He contended that many cryptocurrency initiatives that are securities are attempting to claim that they are not, which he considers sad.
Gensler insisted that the fundamental principle of obtaining money from the public and providing them with basic disclosures should stay in place, even for crypto tokens, in spite of the criticism the regulatory agency has gotten for being somewhat out of step with contemporary technologies.
With this comment from Gensler on Ethereum, it seems as though yet another problem may emerge in the cryptocurrency industry.
Source: Read Full Article