Cryptocurrency

Ethereum Now In Regulator Crosshairs

Regulators in the U.S. are considering the regulation of digital tokens outside bitcoin.

The Wall Street Journal reported that the inquiry is focused on the cryptocurrency Ethereum, which hasn’t been in the crosshairs of regulators as of yet. Sources told the paper the analysis, which is being conducted by federal securities and commodities regulators, is focused on whether the creators of cryptocurrency outside bitcoin exert a lot of influence over the value, similar to how a company’s actions impact a stock and its price.

The report noted the Commodity Futures Trading Commission (CFTC) has determined that bitcoin is largely a commodity, which means it’s not subject to the investor protection rules that are enforced for public companies by the Securities and Exchange Commission (SEC). The WSJ reported that when it comes to Ethereum, some regulators think its creation back in 2014 was likely an illegal securities sale, while others disagree, arguing there is no one person or entity behind ether who plays a role in driving the value of the digital token.

If regulators determine Ethereum is a security and is subject to SEC rules, the WSJ reported it could spur a sell-off and upset cryptocurrency trading exchanges such as Coinbase that let people buy and sell ether. The paper noted that in the past, Coinbase has discussed applying for an SEC license so that it can operate as a brokerage firm.

The report comes just a few days after Gary Gensler, the finance chief for Hillary Clinton’s 2016 presidential bid and one of the top financial regulators in the Obama administration, who is delving into the world of blockchain through a role at the Massachusetts Institute of Technology, argued that Ethereum and Ripple violated securities regulations in the U.S.

“There is a strong case for both of them — but particularly Ripple — that they are noncompliant securities,” Gensler told The New York Times in an interview.

——————————

NEW PYMNTS DATA: HOW WE SHOP – SEPTEMBER 2020 

The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

TRENDING RIGHT NOW