Michael Saylor, CEO of MicroStrategy and BTC advocate, is in the news again. The entrepreneur recently reaffirmed his belief that Ethereum qualifies as a security. This is because developers can change it.
Saylor was talking on the Youtube Channel Altcoin Daily. The co-host, Aaron Arnold, stated that Senator Lummis, a co-sponsor of the Responsible Financial Innovation Act (RFIA), gave Saylor credit for helping to define Ethereum as a commodity.
A Commodity Does Not Change
According to the Lummis bill, any digital coin with adequate decentralization is a commodity. Therefore, it is under the jurisdiction of the Commodities and Futures Trading Commission (CFTC).
Saylor contends that a commodity’s features are unchanging. It cannot have an issuer either. According to the entrepreneur, a vote cannot convert gold into steel or aluminum.
On the other hand, Ethereum’s ICO, leadership, and hard forks show that the developers can substantially alter it. Also, a development team can decide the software alterations applied to the system.
Saylor stated that:
“Any updates to address a fatal fault are fair. However, modifications to the code that fundamentally affect the currency’s valuation or issuance sequence satisfy the Howey Test. As a result, it exposes the token or coin to legislation under securities.”
In addition, the Center for American Progress head of financial regulation, Todd Phillips, concurs with Saylor’s remarks. According to him, most cryptos are securities.
As a result, they must abide by conventional securities legislation. However, Philips said the RFIA does not enforce sufficient disclosure requirements crucial for potential investors.
BTC Is Not A Security But A Commodity, Says Saylor
Philips’ opinions are in line with that of Gary Gensler, Chairman of the SEC. Gensler has frequently maintained that cryptos are securities.
Besides, the SEC has cracked down severely on cryptocurrency firms. This includes those that provide yield products without being registered as securities providers.
Saylor criticized management organizations of such firms for not having a registration statement. Also, he rebuked cryptocurrency exchanges for offering what he considers unlicensed securities.
Additionally, Saylor contends that Bitcoin is different from security. This is because there is no initial coin sale. Also, no one is trying to modify the network’s code.
Meanwhile, most cryptocurrencies are classified as commodities under the CFTC. The CFTC oversees BTC futures contracts under the RFIA.
Furthermore, Patrick McHenry, a member of the House of Rep, has argued in favor of a third regulator. This is because he thinks digital currencies are neither a security nor a commodity. Hence, the third regulator would be in charge of regulating the crypto industry.