Is Ethereum (ETH) really threatened if XRP wins?
Securities and Exchange Commission (SEC) chairman Gary Gensler hinted that there is a possibility that the second largest asset after Bitcoin (BTC) will be 'choked' by supervisory monitoring.
He explained in CNBC's Squawk Box recently,
"We are not involved in any crypto projects, including providing advice or recommendations related to it."
But when asked whether Ethereum is a security or not, this is Gensler's answer: “If any entity raises funds from the public and they make a profit based on promotions, sponsorships, which is the entity's effort-it's in the law which is outlined. ”
Previously the SEC had agreed to conclude Bitcoin (BTC) is not a securities asset. Ironically, the SEC has claimed XRP as a securities asset, causing the case to be tried for more than a year since December 2020.
Meanwhile, the crypto community thinks the SEC may not consider Ethereum as a security even though there was an asset sale in an initial coin offering (ICO) in 2014.
Today, such activities have been categorized as unregistered securities offerings.
In 2018, former SEC corporate finance director William Hinman claimed Ethereum had been completely decentralized, making the asset non -securities.
The SEC today is seen as more assertive and agile towards the crypto industry. The proof, Gensler claims thousands of cryptocurrencies in the decentralized finance industry (DeFi) on the Ethereum network have been operating illegally (or unregistered).
So, it’s no surprise that one day the SEC introduces laws against DeFi as they want to protect investors from investment fraud.
What is meant by an asset as a security?
Securities refer to financial assets that are tradable and have a monetary value such as stocks or bonds. Most securities assets have the criteria outlined by the Howey Test.
