Ex-CFTC Chairman to Teach Blockchain at MIT; Warns on Ether, Ripple Status
Cryptovest
Published Apr 24, 2018 07:56AM ET
Ex-CFTC Chairman to Teach Blockchain at MIT; Warns on Ether, Ripple Status
Gary Gensler, chairman of the Commodity Futures Trading Commission (CFTC) under President Barack Obama and finance chief for Hillary Clinton’s 2016 presidential campaign, has been hired by the Massachusetts Institute of Technology (MIT), where he will lecture about the impact blockchain technology could have on financial markets, the New York Times reports .
During a blockchain conference at MIT on Monday, Gensler used the opportunity to note that Ether (Ethereum’s token) and XRP (Ripple’s token) might get classified as securities rather than commodities, Bloomberg reported . If that happens, these cryptocurrencies will be subjected to greater regulatory scrutiny from the US Securities and Exchange Commission (SEC). On the other hand, Gensler said that Bitcoin, Litecoin and Bitcoin Cash would probably maintain their status as commodities, which are regulated by the CFTC.
On Sunday, Gensler told the New York Times there was a strong argument for both Ether and Ripple, especially the latter, being considered non-compliant securities. The two primary US regulators, the SEC and the CFTC , are continually working to categorize cryptocurrencies into one of the two main groups - securities or commodities - which eventually determines the level of regulatory scrutiny they get.
“2018 is going to be a very interesting time. Over 1,000 previously issues initial coin offerings, and over 100 exchanges that offer ICOs are going to need to sort out how to come into compliance with US securities law,” Gensler noted.
The people behind Ripple and Ethereum do not agree that their tokens should be considered securities. Tom Channick of Ripple said:
“XRP does not give its owners an interest or stake in Ripple, and they are not paid dividends. XRP exists independent of Ripple, was created before the company and will exist after it.”
However, it seems that the SEC is inclined to follow Gensler’s argument.
If the two cryptocurrencies get the status of securities, it will become illegal for US citizens to trade them on most of the crypto exchanges where the tokens are currently listed. The buy/sell process would become more difficult and affect cryptocurrency prices.
This article appeared first on Cryptovest
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