Gensler Reiterates Cryptos Are Securities Before Ethereum ETF Decision

As a researcher with experience in the field of financial regulation, I believe that Gary Gensler’s stance on cryptocurrencies, particularly his view that most of them should be classified as securities, is significant and important for the industry. His perspective aligns with the classic legal criteria for identifying securities, which are backed by entrepreneurs and in which investors make decisions based on information provided by these entrepreneurs.

Despite the growing excitement about potential Ethereum ETF approvals, Gary Gensler, the SEC Chair, maintains a strong stance on cryptocurrency regulation. He insists that the majority of these assets, including Ethereum, fall under the securities category.

As a crypto investor, I’ve been closely monitoring the developments in Washington, D.C., and this week brought some promising news. The political climate shifted significantly, increasing hopes that Spot Ethereum Exchange-Traded Funds (ETFs) could finally get the green light.

During a public address on Thursday, SEC Chairman Gary Gensler restated his belief that the majority of cryptocurrencies should be classified as securities. This declaration was made as anticipation ran high that the SEC would give its approval to a spot Ethereum ETF later in the day.

In a speech to the general public, Gensler reiterated his viewpoint, stating, “Approximately 15,000 to 20,000 tokens exist in this sector. They do not function as currencies.”

In simpler terms, he mentioned that these tokens are usually supported by a team of entrepreneurs. The investing public relies on details from white papers and the entrepreneurs’ websites to make their investment decisions. This arrangement fits the established Supreme Court guidelines for defining securities.

When asked about the SEC’s jurisdiction over the crypto industry, Gensler remarked, “Not every cryptocurrency token can be classified as a security. However, based on my perspective, I suspect that the majority fall into this category.”

Earlier this week, Gensler expressed his criticism towards the Financial Innovation and Technology for the 21st Century Act (FIT21). According to him, this legislation undermines the Securities and Exchange Commission’s (SEC) authority to classify cryptocurrency assets as investment contracts, thereby excluding them from regulatory oversight.

On Wednesday, the House successfully approved FIT21 with a vote of 279 in favor and 136 opposed. Despite expressing opposition to the bill, the White House chose not to issue a veto.

Gensler’s stance that most cryptocurrencies qualify as securities aligns with the widespread belief in the market, leading many to anticipate the approval of Ether ETFs starting Thursday. If realized, this development would represent a major triumph for advocates of digital currencies.

Since the beginning of the week, it’s become clear that the Biden administration and bipartisan lawmakers recognize the significance of cryptocurrencies to American voters ahead of the upcoming elections.

As a seasoned analyst, I can tell you that the acquisition of this information increases the likelihood that fresh regulatory frameworks will emerge. Consequently, exchange-traded funds (ETFs) based on spot ethers, once thought to be unlikely candidates for approval, may now stand a better chance of being greenlighted by the relevant authorities.

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2024-05-23 20:37