Gary Gensler Says SEC Believes Ethereum Is Not a Security—At MIT in 2018

Gary Gensler, the chairman of the U.S. Securities and Exchange Commission (SEC), stated that the SEC does not consider Ethereum to be a security. He made this announcement while speaking at the Massachusetts Institute of Technology (MIT) in 2018. This decision has significant implications for the cryptocurrency industry as it provides clarity on the regulatory status of Ethereum and other similar digital assets. Gensler’s remarks indicate a more progressive approach by the SEC towards cryptocurrencies, which could potentially promote further innovation and growth in the industry.

Gary Gensler, the Chair of the U.S. Securities and Exchange Commission, has been under scrutiny recently for his ambiguous stance on whether Ethereum and other crypto assets are securities or not. However, a video has surfaced on Twitter showing Gensler lecturing at MIT in 2018, confidently stating that Ethereum is “not a security” in the eyes of the SEC. This contradicts his recent refusal to answer whether Ethereum should be classified as a security or a commodity.

In the past, regulators have struggled with how to label Ethereum, which is currently the second-biggest cryptocurrency with a market cap of $227 billion. However, Gensler’s comments in 2018, which aligned with former Director of Corporate Finance William Hinman’s “sufficiently decentralized” speech, indicated that Ethereum was considered decentralized enough to not be deemed a security by the SEC.

It’s worth noting that Gensler was speaking as a professor at the time and wasn’t working for the SEC. His current role as the Chair of the SEC means that he’s required to enforce laws as they’re written. However, Gensler’s refusal to answer questions about Ethereum’s classification as a security or commodity has sparked criticism from industry experts and politicians, especially Republican lawmakers who claim that he’s stifling regulation in the world’s largest economy and forcing American tech companies overseas.

Gensler has previously stated that Bitcoin, the largest cryptocurrency by market cap, is not a security but rather a commodity. Under U.S. law, a security is a tradable financial asset that has monetary value, like stocks or bonds, and meets specific legal requirements under the Howey Test.

The SEC has launched an intense crackdown on the crypto industry during Gensler’s tenure, with Kraken, Bittrex, and Coinbase being among the U.S.-based cryptocurrency exchanges targeted in as many months. Despite his recent actions, some have criticized Gensler for not providing consistent answers regarding Ethereum’s classification, and others believe that he needs to clarify his position on the matter.

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