Now, Senator Lummis Thinks That Ether Is A Security
Lummis and Rostin Benham, who is in charge of the CFTC, have both changed their minds about whether or not Ether is a commodity.
Another US politician who is in the middle of figuring out how to regulate the crypto industry has changed their mind about how Ether fits into the law.
Senator Cynthia Lummis (R-WY) said on Wednesday that she no longer thinks of Bitcoin as a commodity but as a security.
Lummis Says That BTC Is The Only Crypto Commodity:
Lummis talked about how her opinion of the asset had changed while talking about what could have been done to stop FTX from going down last month. She said that her bill to regulate digital assets, which was proposed in June and aims to make it clear how to classify crypto assets, could have done this.
“Right now, the way things sit, it’s starting to look more like Bitcoin is the only thing that would qualify as a commodity,” she said.
The senator’s statement is different from what she said in June, when she said that Ether could be a commodity along with Bitcoin. After September’s Merge, Ethereum switched to a proof of stake consensus mechanism, which makes her think it may not be decentralized enough to meet the bar.
“The inability to de-stake right now make it susceptible to being a security,” she explained.
The Howey Test says that a security is an asset that is issued by a central organization to raise money, and investors expect to make money from holding that asset because of the organization’s work. Most people agree that Bitcoin doesn’t pass the test, but crypto supporters and regulators have been arguing for a long time about whether other digital assets are securities, commodities, or a whole new class of assets.
Gary Gensler, the head of the SEC, has said more than once that he thinks most crypto assets, including stablecoins, are securities. So far, he has only been clear about Bitcoin, which he thinks of as a commodity.
But, like Lummis, Gensler did say that the Merge might have made Ether more like a secure currency. This is because the network gives a stake lockup period in exchange for the promise of rewards for that stake.
Rostin Benham of the CFTC has recently said things that suggest he may have moved toward Gensler’s position, even though he has always thought of Ether as a commodity.
Lummis On Sam Bankman-Fried:
Lummis thought it was likely that Sam Bankman-Fried, the disgraced CEO of FTX, would be hesitant to go to a congressional hearing about the collapse of his exchange after getting an invitation from Maxine Waters, the chair of the House Financial Service Committee, last week.
“I think that there is a potential liability under civil and criminal statutes for things that were done at FTX,” she said. “Not having a board of directors, having 135 companies, not having a clear financial opening for people to look at… it just smacks of fraud.”
Still, the senator thinks that Bankman-Fried should focus on getting through the bankruptcy process instead of trying to fix his public image by testifying to congress.
