"Ethereum is an Unregistered Security"


The crypto ecosystem is, fortunately, or unfortunately, being adapted to the old economy with labels and classifications. The free and wild crypto now has strong ties with stock markets depending on the FED interest rates and regulations.

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The inevitable is happening in front of us. We witness the history and the growth of the crypto ecosystem while the risks are taken; we deeply feel the stress. The free money and quantitative easing era ended up as inflation became a massive threat to fiat currencies.

Discriminating Commodities, Securities, and Equities

Commodity refers to a basic and undifferentiated product on which traders can invest or take positions. Wallstreetmojo

Equity refers to a form of ownership held in a firm, either by investing capital or purchasing shares in the company.
Securities, on the other hand, represent a broader set of financial assets such as bank notes, bonds, stocks, futures, forwards, options, swaps etc Differencebetween

The classifications are too hard for common people as I still have issues with identifying cryptocurrencies by using one of these labels.

Ethereum is mentioned as unregistered security by the regulators in the case of Kucoin. Obviously, the initial coin offering of Ethereum is not appreciated by New York Attorney (seen as security offering). I do not know if there would be any other way for Ethereum to show up successfully in crypto if we go back in time. Unfortunately, it directly affected the crypto ecosystem after several years.

Also, the team is mentioned as profit generating party from the growth of Ethereum. It can be discussed whether the effect is direct or indirect but when the case is tried to be adapted to the old economy, the case is a sign of security offering. I would not claim it, though.

Ethereum blockchain by paying expenses incurred by developers, paying for legal contingencies, research, and further development." This is similar to the capital formation purpose of security offerings in the U.S - Theblock

It is getting more interesting as you dive deep into it. The management costs and developmental costs are paid via sold Ethereum in the open market. Also, the deflationary mechanism is put forth as a structure of security. Well, what would be another option if they did not do that 😅

The influence of Vitalik and some whales are seen as "the managers" or "the owners" of Ethereum in the occasion of merge to PoS from PoW. Whe

Crypto is Crypto, for now

It is not easy to put crypto into a group for the regulators. I believe the approach to crypto should be changed fundamentally. As of writing, the dominant perspective is that Bitcoin is different but the rest of the coins are unregistered securities. There are cryptocurrencies and tokens that work exactly like described as security. However, the whole ecosystem is not possible to be labeled.

I do not really know what is the role of miners / validators / witnesses in the eyes of regulators. The distributed ledger system is something that is unorthodox for the current global paradigm. The classification can be used as a dangerous weapon or a positive bridge for us.

We are likely to suffer some more due to the ambiguity that exists. Keep building guys.

Hive On ✌🏼

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