Why Ethereum Is Clearly A Security
MicroStrategy CEO Michael Saylor told Altcoin Daily that Ethereum (ETH) is security.
According to Saylor, a cryptocurrency can only be considered a commodity if there is no issuer and no one is making decisions on the network. According to Saylor, the fact that Ethereum was initially issued through an initial coin offering demonstrates that it is not a commodity.
“There’s a management team. There was a pre-mine. There’s a hard fork. There are continual hard forks.”
He also discussed Ethereum’s difficulty bomb and how it is postponed every six months, proving the asset is a security.
If the Ethereum difficulty bomb detonated, it would demotivate miners and complete the network’s transition to a proof-of-stake network.
According to Saylor, a cryptocurrency can only be considered a commodity if there is no issuer and no one is making decisions on the network.
“If you look at most of these cryptos, where they have hard fork after hard fork after hard fork, the problem with a hard fork is changing the protocol means that some development team is making a decision, and if you can change the protocol in a material way, you can change the monetary protocol. A hard fork can change the issuance pattern, or it can change the value of something. So that makes an investment contract under securities law.”
Saylor believes Ethereum’s ability to change is also a problem in terms of securities law. People, he claims, want a non-changeable decentralized protocol like Bitcoin.
Meanwhile, he acknowledged that securities can be useful. However, “full and fair disclosures” about these tokens are required. Furthermore, he cited the Securities and Exchange Commission’s (SEC) recent statement that any cryptocurrency that generates staking yields is a security.
Saylor’s statement follows a lawsuit filed against Solana (SOL) regarding security.
Many people in the cryptocurrency community disagree with this assessment. Several podcasters have noted that even SEC chairman Gary Gensler has not referred to Ethereum as a security.
According to George at CryptosRUs, even Bitcoin has had upgrades, including the SegWit upgrade, which was one of the reasons for the Bitcoin Cash hard fork.
Senators Kirsten Gillibrand and Cynthia Lummis also proposed a cryptocurrency bill that specifically classified Bitcoin (BTC) and Ethereum as commodities.
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