By Shelly Melancon (Switzerland)
It appears that the wait for the adoption of cryptocurrencies by a powerful country may extend for a while longer. Crypto lovers have long predicted that more countries will adopt cryptocurrencies; it looks like the predictions may become reality but there are a few hurdles to be crossed before we reach that point. One of them is the official recognition of cryptocurrency as securities.
The agency in charge of securities in the US, the Securities and Exchange Commission (SEC), has not taken a position about the status of Ether as a security in the US. The SEC has become popular in the crypto industry for its ongoing case with Ripple Labs, the parent company of XRP token. But the SEC is also positively popular with crypto lovers for recently approving the listing of a few Bitcoin-based futures exchange-traded funds, ETFs.
The Commissioner of the SEC, Hester Pierce, was asked by a Twitter user if the SEC will recognize Ether as a security. But Pierce avoided answering the question and instead said that instead of going analytical about the status of an asset (referring to cryptos), she would rather focus on creating clear and actionable regulations for the crypto industry.
The SEC and Crypto Regulation
In 2018, the director of the SEC’s division of corporation finance, William Hinman, said that Ether and other cryptocurrencies are not securities. Although that was his opinion and not the official SEC position, it reflected the general idea that the financial regulatory agencies in the US have about cryptocurrencies. The SEC later said his comments should be disregarded as they don’t represent the official decision of the SEC concerning cryptos.
Also read:But since then, the SEC has been involved in several activities that make it difficult to tell its true stand. After accusing Ripple Labs of selling unregistered securities in 2020, the SEC has been locked in a legal battle with Ripple Labs for nearly a year now. Yet, the SEC recently approved a historical number of crypto-based ETFs for trading on the stock exchange; although it pointedly refused a bitcoin-spot ETF.
Accusations Against the SEC
In October, the CEO of Ripple, Brad Garlinhouse, insinuated that the SEC was selective in its crackdown on cryptocurrencies. He did this when he noted that Ether’s market capitalization surpassed XRP’s due to what he termed a “free pass” by the apex regulatory agency.
But the SEC has previously stated that it is not seeking to kill the cryptocurrency industry but to fund the best working regulatory framework to make it safe and secure for users. The SEC is particular about the susceptibility of cryptos to fraud and manipulations.
The positions of the SEC chairman and commissioner, Gary Gensler and Hester Pierce, on cryptocurrencies approval as securities seems to be related. Incidentally, both of them are known crypto lovers but are also known to be dedicated to doing things right. Gensler has previously called on the members of the crypto industry to engage the SEC in a discussion towards finding the best path.
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