The Chair of the SEC, Gary Gensler, remains firm regarding the regulation of cryptocurrencies, emphasizing that most of these assets, along with Ethereum, should be classified as securities despite the surge of anticipation surrounding the approval of spot ether ETFs.
This week saw a significant change in the political climate in Washington, D.C., which gave hope that spot ether ETFs would be approved.
In a public speech on Thursday, SEC Chair Gary Gensler reaffirmed that he considers most cryptocurrencies to be securities. His comments came amid widespread expectations that the SEC would approve spot ether ETFs later that day
Gensler restated his stance in an address to the public, claiming, “There’s 15,000 or 20,000 tokens in this field. They do not operate as currency.”
He added that typically, these tokens are backed by a group of entrepreneurs and the public invests based on information from white papers and websites related to these entrepreneurs. This scenario aligns with the classic Supreme Court criteria for identifying security.
Gensler responded when questioned about the SEC’s authority over the industry, “Not every crypto token is a security … but I believe, again without prejudging, most are.”
Gensler criticized the Financial Innovation and Technology for the 21st Century Act, or FIT21, earlier this week. He contended that the statute invalidates the designation of cryptocurrency assets as investment contracts, exempting them from SEC regulation.
The House passed FIT21 on Wednesday by a vote of 279 to 136. Although it had stated that it was against the act, the White House did not veto it.
Gensler is reinforcing his view that the majority of cryptocurrencies are securities, which is in line with market expectations that spot ether ETFs would be allowed on Thursday. This would be a significant victory for proponents of cryptocurrencies.
There have been signs since the start of the week that the Biden administration and lawmakers of both parties understand the importance of cryptocurrency to American voters in the run-up to the elections.
This knowledge makes it more likely that new regulations will be implemented and that spot ether ETFs, which were previously predicted to be rejected, will be approved.
Also Read: SEC Starts Talks with Ethereum ETF Issuers on S-1 Forms
