Former managing authority of financial regulation, Obama, Gary Gensler (Gary Gensler) believes that cryptocurrencies such as ether and Ripple are unregistered securities and violated the law. His comments came shortly after the venture capitalists and lawyers who invested in the projects based on Ethereum, held
closed meeting with the Commission on securities and exchange Commission (SEC) to prevent such regulation. Representatives of both coins insist that these crypto currencies are not securities.
Gary Gensler told The New York Times: «I will be very surprised if 10 years from now these coins will have some weight in the financial system. Many of the things that are popular now will be forgotten.» Speaking of coins, he was referring to cryptocurrencies as a whole is a statement Gensler did in his speech at the Massachusetts Institute of technology (MIT).
In particular, he paid special attention to two popular cryptocurrencies – Ripple and the airwaves, noting that they with high probability will be regarded as securities. If this happens, according to many experts, the cryptocurrency will considerably lose in the price. Regulation of securities imposes on issuers a lot of legal fees and costs necessary for compliance are often prohibitive and burdensome.
«2018 will be very interesting. More than 1,000 previously held ICO and more than 100 exchanges that offer their tokens will have to figure out how to organize its work in accordance with the laws of the United States securities,» said Gensler.
It was recently reported that large investors have discussed with the SEC the regulation of tokens. In particular, they raised the issue of the exclusion tokens on the basis of the blockchain from the scope of the monitoring Agency. If the SEC will begin regarded a large part of the tokens as securities, that could potentially become a big problem for tens of billions of dollars invested in cryptocurrencies such as ether and Ripple.
If such a scenario develop, then exchange the US – one of the largest cryptocurrency markets in the world – in fact, will be cut off from the trade of ETH and XRP. It is obvious that such a development could significantly affect the price of both coins.
60-year-old Gensler currently participates in the MIT Media Lab and its Digital Currency Initiative, and also teaches at the international business school at the Massachusetts Institute of technology Sloan the topics on the blockchain, and shares with the students his experience in the financial sector.
In response to comments Gensler Ethereum Foundation stated that it «does not control the supply and has no way to release the air, and the amount of air, which has a facility (less than 1% of all coins), already lower than that owned by many other industry participants,» — said in the Times. The representative of the Ripple also reacted to comments:
«XRP is not giving their owners shares in the Ripple and not the dividends are paid. XRP exists independently of Ripple were created before company, and will exist after it.»