He was speaking in the daily altcoins YouTube channel, where co-host Aaron Arnold said that Senator Cynthia Lummis (R-Wyo), a co-sponsor of the Responsible Financial Innovation Act, credits with helping define Ethereum as a commodity.
According to the bill, any digital token with sufficient decentralization, a somewhat opaque distinction, should be seen as a commodity and fall under the purview of commodities and Futures Commerce Commission (CFTC) instead of the Securities and Exchange Commission (SEC).
A commodity cannot be exchanged
The characteristics of a commodity cannot be changed, Saylor argues. It also cannot have an issuer. Gold cannot be changed to steel or aluminum based on a vote. In contrast, Ethereum initial coin offeringmanagement team and hard Forks demonstrate that it can be fundamentally changed.
A development team can agree on the software changes that need to be made on the network. Any change to fix a fatal flaw is reasonable, Saylor argues, but changing the code in a way that fundamentally alters the coin’s value or issuance pattern means the coin or token passes Howey’s test and is subject to the law. of values.
Securities must be sold subject to full and fair disclosure, including company owner and risk factors.
Todd Phillips, director of financial regulation at the liberal think tank Center for American Progress, agrees. The thinks that most cryptocurrencies are securities and therefore must comply with common securities laws. He said the Responsible Financial Innovation Act bill fails to impose important proper disclosure rules on potential investors.
His views echo those of SEC Chairman Gary Gensler, who has argued on multiple occasions that cryptocurrencies are securities. The federal agency has repressed hard on crypto companies offer performance products without registering as a securities provider.
Saylor criticized cryptocurrency exchanges for providing what he sees as unregistered securities and management teams of said companies for lacking a registration statement.
Bitcoin is not a security because it does not change, says Saylor
Bitcoin, Saylor argues, differs from a security in that there was no initial coin offering, nor does anyone want to change the software on the network. Suppose you trust the physics of the bitcoin network with your proof of stake consensus mechanism. In that case, there is no need to keep updating the software.
the Responsible Financial Innovation Law classifies most cryptocurrencies as commodities, ranking them under the Commodities and Futures Trading Commission, which regulates bitcoin futures contracts. The bill allows rebuttals against the notion that a particular token is a security.
Republican Patrick T. McHenry (RN.C..) believe that crypto assets are not a commodity or a security and has advocated for a third-party regulator to manage the space.
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