SEC Boss Won’t Say If Ethereum Is a Security
During his Monday appearance on CNBC, U.S. Securities and Exchange Chairman Gary Gensler refused to comment on whether Ether is an unregistered security, the question at the center of the high-stakes Ripple lawsuit:
We don’t get involved in these types of public forums, talking about any one project, one possible circumstance and give legal advice over the airways that way.
Gensler says that thousands of cryptocurrency projects are trying to raise money from the public, but it is important for them to share a relevant set of disclosures with investors.
The SEC boss also bemoaned the lack of compliance within the industry, claiming “way too many” cryptocurrency projects that are securities are trying to masquerade as something else in order not to go through the hassle of registering with the SEC:
Unfortunately, way too many of these are trying to say ‘Well, we are not a security. We are just something else.’
Gensler has repeatedly dodged the same question during his tenure, claiming that the SEC will not comment on specific cryptocurrencies. The SEC’s lawsuit against Ripple, which alleges that the XRP token is an unregistered security, now stretches into its second year.
He also refused to comment on the ConsitutionDAO project, a decentralized autonomous organization that made headlines in late 2021. Constitution DAO lost its bid to billionaire collector Kenneth Griffin who shelled out $43.2 million for a rare copy of the U.S. Constitution.
Critics often argue that the SEC is out of step with modern technologies given that the Howey Test, a litmus test for determining whether a certain token is a security, dates back to May 1946.
Gesnler does not buy this argument. Crypto tokens are new, but the basic idea of raising money from the public and providing them with basic disclosures should remain in place, according to the SEC boss. He claims that it is important to bring innovation into securities laws.
Our role at the SEC is to ensure that you, the public, still get the basic protections.