America’s Securities and Exchanges Commission (SEC), led by former bankers’ lawyer Jay Clayton, is apparently considering whether ethereum should be regulated as a security according to WSJ.
Ethereum’s pre-sale in July 2014, which raised 31,000 bitcoin worth $18 million at the time, was “probably an illegal securities sale” according to some regulators, the Journal says citing un-named sources familiar with the matter.
The regulators are exploring whether founders of cryptocurrencies, other than bitcoin, have any control over the currency’s price, like CEOs might influence a company’s stock price.
The matter is to be discussed on Monday between senior officials at the SEC and at America’s Commodities Futures Trading Commission (CFTC).
CFTC has exercised jurisdictional oversight over cryptocurrencies, like ethereum, while SEC has claimed all tokens are securities.
SEC is now seemingly considering a widening of its jurisdiction to cryptos themselves, but that would raise many questions, including who exactly would file with the SEC for a decentralized cryptocurrency like eth.
They have further stated already that although they consider the DAO to have been a security (something never challenged in court) they would not take enforcement action.
Any enforcement action in regards to the eth pre-sale therefore can not be on the table. In regards to the current eth network, the requirements for a security classification would certainly not be met because, if nothing else, no money is being pooled.
Even if SEC does take the unimaginable step of revealing itself so fully to be doing the bankers’ bidding, enforcement would be impossible.
SEC’s jurisdiction can not apply in historically neutral Switzerland, where the Ethereum Foundation is based. Moreover, there is nothing special about bitcoin that it should not be in such consideration except that Nakamoto is unknown.
The fact he is unknown means anyone can put forward such code in a way they are unknown, thus making enforcement impossible, for coders can simply not reveal their identity.
Which means all this news serves to do, is for some to now start loudly calling for the resignation of Jay Clayton.