US Securities and Exchange Commission (SEC) Chairman Gary Gensler has declined to comment on whether smart contract platform Ethereum (ETH) qualifies as a security or a commodity.
In a new interview with Bloomberg Television, Gensler says he won’t answer questions about Ethereum’s classification as an asset, pending the regulator’s decision on ETH Exchange-Traded Fund (ETF) applications in the spot market.
“Each of these crypto tokens deals with the facts and circumstances of whether the investing public expects profits based on the efforts of others, but we do have fillings in front of us. I’m not going to comment.”
Gensler says cryptocurrencies are a highly speculative asset class, citing Bitcoin’s (BTC) volatility in recent days.
“I grew up loving roller coasters. I may not ride it as much in my adult years, but as an investing public you really need to be aware that this is a bit of a rollercoaster ride with these volatile assets.
The question is: how solid is its foundation? You reach the top of that hill. What is the fundamentals underneath, their cash flows or what is the use case for thousands of these tokens?”
The SEC Chairman further reiterates that there are a number of contexts in which digital assets can be considered securities. He says a determining factor is what an investor expects from the asset when he buys it.
“There are about 15,000 to 20,000 [digital assets]. They can also be effects because the investing public is dependent on the efforts of a group of entrepreneurs involved in these products.”
The SEC greenlit 11 applications for spot Bitcoin ETFs in January. The agency could decide on ETH ETF bids in the spot market sometime in May.
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