The different views of US regulators regarding Ethereum have brought the securities-commodity discussions to the agenda again and brought to mind the question that will determine the future of the industry: What status are cryptocurrencies?
US regulators have taken steps in recent days to inflame the debate about whether cryptocurrencies are commodities or securities. These discussions continue to deeply affect investors and the cryptocurrency market, especially many cryptocurrency exchanges. So what does the commodity and securities mix mean for cryptocurrencies? Let’s take a look at how the possible outcomes can take this industry.
Commodity or security?
US regulatory agencies for cryptocurrencies “Commodity? Is it securities?” The turmoil hit the cryptocurrency markets once again. In the light of recent developments and statements, US institutions Bitcoin (BTC) all cryptocurrencies except committed to securing stands.
When the market dynamics of Ethereum are examined, the definition of securities stands out according to many experts. As a result, it is perceived as an actively functioning asset in the market, developed by certain individuals and where investors aim to make a profit. new York presented on March 9 by the province KuCoin The definition in the petition also supports this:
It is a speculative asset that relies on the efforts of third-party developers to generate profits for Ethereum investors.
However, it has long been used to determine whether a financial product is a security or a commodity. Howey testindicates that assets other than Bitcoin are securities. this test investment of money, joint venture, reasonable expectation of profit and labor of third parties It takes into account four important factors. It is striking that the statements used in the recent case files clearly emphasize the Howey test.
If the process continues in this direction, bitcoin It is easy to put all crypto-assets except for the security status. At this point, only Bitcoin can qualify as a commodity. The consequences of this will likely bring Bitcoin to the fore in the long run.
On the other hand, yesterday US Commodity Futures Trading Commission (CFTC) especially in the statement made by Qualifying Ethereum as a commodity then another official institution today in Ethereum specific “it’s a stock” that he filed a lawsuit by saying, the confusion clearly demonstrates.
Why are definitions of commodities and securities important?
The crypto sector, which has not yet been truly regulated, has been trying to gain a place in the financial markets for many years. One of the biggest advances in this space acquisition is according to many experts. Clarification of the definition of commodities and securities seen as. Even with the regulation, these definitions are also clarified. bull run There are even those who think it will.
These definitions are defined according to the transaction view of the assets and their financial services. At this point, securities; stocks, bonds And mutual funds like US Securities and Exchange Commission (SEC) financial instruments that are subject to audit.
Commodities, on the other hand, are physical goods or raw materials traded on exchanges. Gold, oil And sweetcorn are examples of commodities. They are generally not regulated by the SEC and their values according to market supply and demand determines. Commodities are often used to hedge against inflation or to diversify investment portfolios.
SEC Chairman Gary Gensler In an earlier statement, Ethereum’s Commodity Futures Trading Commission (CFTC) Cryptocurrencies providing staking services, even though they are defined as a commodity by Howey test in the scope of securities had been classified as.
Commodity or security status is of great importance for the sector and emerges as a criterion that has the potential to play an important role in the direction of cryptocurrencies. Accordingly, the crypto industry integration into the financial system can be provided on a larger scale or many other projects Ripple (XRP) may have to grapple with long-term courts such as
What does it mean for the Ripple lawsuit?
According to experts, the latest developments also shape the long-standing Ripple case. It may be appropriate for regulators to put Ripple in the same category where Ethereum is defined as a security. If it is decided by the institutions in line with the definition of “securities” Ripple and SEC After two and a half years of litigation between result in disappointment also seems likely.