SEC Chair Won’t Comment on Whether Ethereum is a Security
Jan 11, 2022
Questions about whether Ethereum is an unregistered security or not were dodged by Gary Gensler, the head of the US Securities and Exchange Commission, during his last interview.
No Comments from SEC on the Ethereum Issue
In an interview with CNBC, the head of the regulator claimed that the agency does not discuss individual projects or provide legal advice on air.
The query was about the pending case between the SEC and Ripple. The commission led by Gensler found that Ripple's domestic token, XRP, is an unregistered security, which the cryptocurrency company and some of its top management exploited for profit.
While Ripple has consistently tried to deny the claims, it has stated that the SEC case was directed at it and that Japanese officials said that the XRP token does not belong to securities. This, as they say, should be considered in their favor in the current dispute.
Request from Ripple for SEC Documents on Ethereum
That aside, the cryptocurrency company requested papers from the SEC detailing how it established that Bitcoin and Ethereum, the two biggest cryptocurrency assets by market capitalization, were not considered securities.
Surprisingly, the SEC declined to hand over these files, claiming that they contain confidential data. Despite a court order from Judge Netburn, the agency did not provide Ripple with documentation on Bitcoin, Ethereum, and XRP.
According to the judge's decision, intradepartmental memos or formal policy documents covering Bitcoin, Ethereum, and XRP must be sought and prepared. Reports, conclusions of inner working units, and official position docs presented to commission members are considered such materials.
Discussion About Cryptocurrency Regulation
In the interview, the SEC chief also addressed regulation in the cryptocurrency sector. Too many initiatives in this field, according to Gary Gensler, do not meet legal requirements.
He further stated that these ventures commonly purport to be something else to avoid registration with the SEC, even though a majority of such assets are counted as securities.
Under Gary Gensler's chairmanship, the SEC has frequently pushed cryptocurrency enterprises to register with the agency to better safeguard public members.