Ever since Ethereum moved from Proof of Work (PoW) to Proof of Stake (PoW) mechanisms, there has been ongoing debate about whether digital assets are now security or commodities. A notable person shares their insights on this and how the regulatory bodies actually classify cryptocurrencies. The latest is Cardano founder Charles Hoskison, who shared his thoughts on a recent Twitter Space.
Regulators are too vague
One of the remaining problems for regulatory bodies regarding cryptocurrencies is the lack of a clear framework for the regulation of these digital assets. In this case, the issuer of the token and his operator of the network cannot see which framework their assets are under.
Cardano founder Charles Hoskinson lamented this lack of transparency in a recent Twitter space hosted by Perriand Boring and Terra Goody Gillen. Hoskinson explained that there is really no way to know for sure, “I want to know what the criteria are.”
Regarding the question of whether Ethereum is a security, we have come to the conclusion that there is a lack of a proper framework for classifying such assets. Yes, the shift to proof-of-stake mechanisms is important in this factoring, but that’s what everyone says for now.
“Now it’s a proof-of-stake system…and maybe now it’s security,” Hoskinson said. “Do you know? As you know, they are not going to take an official position in any way.” It said it needed “some form of guidance” from lawmakers to properly classify digital assets such as
ETH recovers above $1,500 | Source: ETHUSD on TradingView.com
Is Ethereum Security?
This issue continues to weigh heavily on the minds of investors and regulators in the space. Neither the SEC nor the CFTC can seem to agree on where Ethereum actually falls. The SEC is in a position to classify digital assets as securities and regulate them as such. However, the CFTC appears to be against this.
At the “Regulating Financial Innovation: The Future of Crypto and Blockchain” symposium, held jointly with the Rutgers Center for Corporate Law and Governance, the Wall Street Blockchain Alliance, and Loewenstein Sandler LLP, The CFCT has made some surprising revelations regarding the taxonomy of Ethereum. .
CFTC Chairman Rostin Behnam said regulators see both Bitcoin and Ethereum as commodities. However, SEC Chairman Gary Gensler, while willing to accept Bitcoin’s status as a commodity, does not welcome the idea of classifying ETH and XRP as commodities.
With no resolution in sight between these two regulatory watchdogs on what is a commodity and what is not, a formal classification is unlikely in the near future. Gensler also opposes the idea that the CFTC is well positioned to regulate the cryptocurrency market as a whole.
Featured image from The Coin Republic, chart from TradingView.com
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