In a recent interview on CNBC, Gary Gensler, the Chairman of the United States Securities and Exchange Commission (SEC), refrained from directly classifying Ethereum as a commodity or security. Instead, Gensler emphasized the protection of American investors and addressed the behavior of intermediaries in the crypto industry.
Gensler expressed his primary concern for safeguarding American investors and noted that they are currently not receiving the necessary information. When asked about Ethereum during the “Squawk Box” program with Andrew Ross Sorkin, Gensler stated, “What I can say is that my central concern is: how can we protect the American investor? Currently, they are not receiving the information that is properly required.”
Furthermore, Gensler criticized the existing structure of the cryptocurrency market, comparing it to practices that are prohibited in more conventional markets. He stated, “And the intermediaries, who are at the heart of this centralized market, often operate in conflict, doing things that we would never allow the New York Stock Exchange to do, like trading against the investors.”
The legal status of Ethereum is a significant area of interest as it could determine the regulations and potential inclusion in exchange-traded funds (ETFs). However, Gensler did not confirm its classification.
During the interview, Gensler mentioned that the SEC is currently reviewing several Ethereum-based ETF filings. He took the opportunity to shift the focus from specific findings to the broader goals of the SEC, emphasizing investor protection as the top priority.
Although Gensler did not disclose the SEC’s stance on Ethereum, the actions of the agency suggest a move towards classifying Ether as a security. Ongoing investigations into the Ethereum Foundation and the existence of court documents pointing in that direction support this possibility.
Gensler clarified that the SEC’s attention to cryptocurrencies is driven more by public interest and media coverage than the commission’s own agenda, despite crypto representing a small portion of the financial market. He stated, “The focus on cryptocurrencies is more a response to public interest and media coverage than a reflection of our regulatory agenda.”
The SEC chairman also highlighted the lack of compliance with necessary regulations among many tokens, resulting in a lack of transparency and adequate investor protection.
In conclusion, Gensler avoided delving into the oversight of other market players, such as Robinhood, which has faced potential legal action from the SEC. He reiterated that the commission’s objective is to ensure investor protection and compliance with securities trading laws.
Disclaimer: The opinions expressed in this article are for informational purposes only and do not constitute financial, investment, or other advice. Investing or trading cryptocurrencies carries the risk of financial loss.
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